Bitcoin

siac

Ninja

I am 100% convinced, for a wide array of reasons, that Bitcoin will not exist in 10 years. It will go down as the "tulip mania" of the 21st century. 

Ninja

I am 100% convinced, for a wide array of reasons, that Bitcoin will not exist in 10 years. It will go down as the "tulip mania" of the 21st century. 

If you are 100% sure you should put your life savings, house, etc, on bitcoin futures and short it.

Personally, as a currency (and several other use cases) I think it's here to stay; if not bitcoin then a different crypto at least.

I am 100% convinced that no other "crypto" can possibly usurp bitcoin as a store of value. They do not have the level of decentralisation required, and they do not have the certainty of the schedule of supply that bitcoin has. But most importantly, it's simply too late. 
Someone can definitely design something that could work better in theory, but it would not be able to get off the ground without marketing, funding, and numerous other things that immediately rule it out in terms of beating bitcoin at the decentralisation game. 
The advantage bitcoin has is that it was created when no one knew this was possible, and initially it was able to run without major funding, marketing, and without being under major attack by threatened actors. No new "crypto" is capable of doing this now, the horse has bolted. Just like an equal or better protocol could be invented for the internet, but will not eventuate, because it's already been sorted - the advances in the internet are built on the next level up, above that protocol, which is set in stone. 
This is AC vs DC. VHS vs Betamax. Internet vs Intranet. If you want to innovate in this space, then look to the 2nd layer, or look at alternative "cryptos" that have different blockchain use cases. Bitcoin has already won the battle to be the digital first layer store of value for our world. 
I am less than 100% certain that Bitcoin will be the monetary network of the future however. Other "cryptos" are designed better in this respect, and have the frameworks to handle it. However, I am still sitting at 99%, thanks to the Lightning Network, and the promising start to adoption in El Salvador, via the Bitcoin Beach initiative. Having looked into the Lightning Network a lot lately, and run a few channels and started to understand how it works, I am mightily impressed. It's a thing of beauty. 

Another way to look at it is that Bitcoin should be seen as a discovery, not an invention.
An interesting comment I saw online that made me think about this;
"Absolute mathematical scarcity achieved by consensus in a sufficiently decentralised distributed network was a discover rather than an invention.
It cannot be achieved again by a network made up of participants aware of this discovery, since the very thing discovered was resistance to replicability itself."

Bitcoin will be increasingly regulated and governments will push their own crypto like the crypto currency that the US Federal Bank is developing.

It's hard to see what bitcoins usecase is at that point.

The use case is that it is the best store of value in human history, and cbdc's will not be able to touch that. No government has the financial discipline or the bravery to program their cbdc to be as scarce as bitcoin, or even if they did, they cant decentralise it sufficiently enough to protect against future politicians from ruining that scarcity. 
Cbdcs will likely be a critical element in the future of finance, specifically as the means for government spending distribution, but they will never usurp bitcoin's use case as the world's best store of value.
Full global regulation and suppression is impossible. Many countries have already banned it, and then been forced to reverse it, or at least tacitly accept it. Nigeria was one of the most hilarious examples. They banned it and within months the finance minister was in parliament saying they cant feasibly eradicate it, and now they need to embrace it. 
The problem if you ban it, is that you expose yourself completely to any country that does not ban it. Unless every single country bans it, its impossible. The hardest money wins automatically on merit, so if you ban it you just submit to being inferior in the long term to anyone who does not ban it. It would be a silly risk for any country to not at least hold some, and I would be shocked if even China wasnt holding a significant amount, for example. 

siac

Ninja

I am 100% convinced, for a wide array of reasons, that Bitcoin will not exist in 10 years. It will go down as the "tulip mania" of the 21st century. 

Ninja

I am 100% convinced, for a wide array of reasons, that Bitcoin will not exist in 10 years. It will go down as the "tulip mania" of the 21st century. 

If you are 100% sure you should put your life savings, house, etc, on bitcoin futures and short it.

Personally, as a currency (and several other use cases) I think it's here to stay; if not bitcoin then a different crypto at least.

There are several reasons why I would never consider this. Firstly, the old-adage of "markets can stay irrational longer than you can stay solvent" rings true. Bitcoin could easily go to 100k before its eventual inevitable downfall. Putting all of my money on a short position could wipe me out financially, even though I'm pretty much certain that BTC will be worthless, or near worthless, within a decade.

I have many theories for why BTC will fail - i.e. one possibility is a global crackdown by regulators due to its incredible consumption of energy (equivalent to countries like Czech Republic, despite it being a relatively small asset in comparison with other markets). This would be pretty easy, and it would probably be top down, coming from the UN, BIS, IMF, type entities I'd imagine. Furthermore, it pretty much avoids existing AML/CFT regulations and is seen by regulators as a way of money laundering and financing criminal activity. Another possibility is the collapse of Tether, which is an unregulated entity that prints insane amounts of synthetic USD that props up the BTC market. Moreover, it is essentially build-upon a rudimentary technology - proof-of-work cannot come close to competing with more technologically advanced solutions that can provide near instant cross-border settlement with finality. It's essentially the Ford Model T - a great innovation, but vastly inferior to the average car today.

The "store of value" argument is also nonsense. It is an incredibly volatile asset - you could purchase a Bitcoin today and lose 10% of your purchasing power in days. If you bought at the peak you would have lost over 40% of your purchasing power - so how can this credibly be called a store of value? Just because BTC has trended upwards for 10 years or so, doesn't mean it will always go up. 10 years is nothing in financial markets.

Another interesting point - Michael Saylor owns the most BTC apart from Satoshi Nakamoto. Most of the BTC his company has purchased has been financed via debt. If the price of BTC drops to a certain level he will have no choice but to sell all of his bitcoin to pay off creditors. Dumping 200,000 BTC on the market (for example) could easily cause a crash. But I think this is the weakest argument for why I believe BTC will fail.

Agree with this, no matter how confident you are, shorting would be a risky venture;
"There are several reasons why I would never consider this. Firstly, the old-adage of "markets can stay irrational longer than you can stay solvent" rings true. Bitcoin could easily go to 100k before its eventual inevitable downfall. Putting all of my money on a short position could wipe me out financially"
Not that I'm any kind of expert on that sort of thing of course

"one possibility is a global crackdown by regulators due to its incredible consumption of energy (equivalent to countries like Czech Republic, despite it being a relatively small asset in comparison with other markets). This would be pretty easy, and it would probably be top down, coming from the UN, BIS, IMF, type entities I'd imagine. Furthermore, it pretty much avoids existing AML/CFT regulations and is seen by regulators as a way of money laundering and financing criminal activity."
A "global crackdown" is only possible if you literally have the globe on board. The minute you have an element that are not down with it, then you have a problem. And that problem is already here. The Central African Republic just passed Bitcoin as legal tender, second to do so after El Salvador. And that will be the pattern - the countries that desperately need something like Bitcoin will all embrace it, eventually, and then it will out-perform all competitors. It's like trying to supress the internet in the 90s. It will end in failure. 
It's been shown over and over that Bitcoin is not a good vehicle for criminal activity any longer. Yes it is anonymous, but it's also completely transparent. There are now bitcoin blockchain analysts who work with authorities to provide info on criminal activity using bitcoin. This work will continue to get more advanced. Conducting criminal activity in bitcoin is silliness, and there are now cryptocurrencies which have been designed specifically for privacy that allows this to be done better e.g. Monero and others. And I'm not even sure they will dominate that market anyway. Recent analysis has shown that a larger percentage of fiat currency is used for criminal activity than that of bitcoin, and the bitcoin percentage is continuing to shrink.
How much of the internet traffic is used for criminal activity, and why are we not shutting down the internet? It's the same argument.
A lot of this stuff simply comes down to the average person not yet understanding what Bitcoin actually is. 

" proof-of-work cannot come close to competing with more technologically advanced solutions that can provide near instant cross-border settlement with finality. It's essentially the Ford Model T - a great innovation, but vastly inferior to the average car today."
Proof-of-work is not the technology that allows for cross-border settlement with finality. That technology sits on the second layer - the lightning network. 
Proof-of-work ensures that value is stored in bitcoin. To create it, you must do work. Bitcoin is energy captured in a digital asset. Without PoW, bitcoin has no value. 
The lightning network is the Ford Model T that you speak of. There will be better cars in future, but at the moment it's the best, just like when the Model T came out.
Bitcoin is simply the car. It's been discovered and it's amazing. What we do with it will continue to advance and get better and better.

"The "store of value" argument is also nonsense. It is an incredibly volatile asset - you could purchase a Bitcoin today and lose 10% of your purchasing power in days. If you bought at the peak you would have lost over 40% of your purchasing power - so how can this credibly be called a store of value? Just because BTC has trended upwards for 10 years or so, doesn't mean it will always go up. 10 years is nothing in financial markets."
Bitcoin is volatile as it is so early, and still finding its price point. This will go on for some time - as you say, 10 years is nothing. 
When assessing something as a store of value, the price fluctuations when its in its infancy are not the metric with which it is assessed. 
A good store of value is simply transmissable over space, and time. 
The best store of value we have ever had is gold. 
Bitcoin is better at transmitting over time as the supply schedule is fixed at a rate more consistent than gold, and bitcoin is scarcer.
Bitcoin is better at transmitting over space as you do not need to physically transfer it, unlike gold. 

Regarding the energy debate...
If you start from a point that bitcoin is not useful and holds no value, then it is logical and understandable that you would be of the opinion that the energy use is excessive and unnecessary.
However if you come from a starting point where you believe bitcoin is the next internet-level technological breakthrough for humankind, then you see it a little differently.
For me, the more energy bitcoin uses the better. It makes the network more secure and it drives renewable energy adoption (the most profitable way to mine bitcoin is to find the cheapest energy source possible, which is either wasted energy or renewable energy, and that is why bitcoin mining is so heavily dominated by renewable energy sources).
There's some great analysis out there that suggests that bitcoin mining is the cleanest industry in the world. 
If we are to look at the energy use of every industry in this way, then it's very interesting when you assess some of the other industries. 
Personally, I am not a fan of christmas lights. I do not see much value in them. And yet they have an enormous energy footprint. 
I do not own a clothes dryer, we dry all our washing the traditional way. The energy footprint of clothes dryers is larger than bitcoin, and is simply a matter of convenience for people. If we are to look at bitcoin in this way, then why not everything else? 
New York is looking at a bill to keep bitcoin mining off their energy grid. But they will welcome someone like pornhub for example, setting up a server farm and using their energy grid. What societal benefit are we getting from pornography? Why are we not looking at the energy footprint of porn? 
And then the big cheese... gaming. Why are we tolerating the enormous energy use and carbon footprint for gaming, if we aren't prepared to tolerate it for other things? 
I posit to you that this is a question of personal opinion, and whether or not you think these things are valuable, and therefore worth the energy. 
Another interesting point worth considering, is that you really should compare the energy footprint with the energy used to back fiat currencies. Once upon a time this was essentially proof-of-work via the mining of gold, when currencies were backed by gold. They switched their backing to oil through the 20th century ("the petro dollar"), which essentially means it's backed by the US military. The energy footprint there is obviously enormous. I posit that should bitcoin become the world's unit of account, the energy footprint will be less than that of fiat, and exponentially more sustainable. 

Sorry for the flood of writing people. I thought Ninja made some pretty considered points that I really wanted to answer, and give him/her the point of view from someone on the other side

This was a really good point I had not considered before;
"Another interesting point - Michael Saylor owns the most BTC apart from Satoshi Nakamoto. Most of the BTC his company has purchased has been financed via debt. If the price of BTC drops to a certain level he will have no choice but to sell all of his bitcoin to pay off creditors. Dumping 200,000 BTC on the market (for example) could easily cause a crash. But I think this is the weakest argument for why I believe BTC will fail."
That seems logical, and yes it could well cause a crash. Will be interesting to see how that plays out.

interesting information

paulm

"The "store of value" argument is also nonsense. It is an incredibly volatile asset - you could purchase a Bitcoin today and lose 10% of your purchasing power in days. If you bought at the peak you would have lost over 40% of your purchasing power - so how can this credibly be called a store of value? Just because BTC has trended upwards for 10 years or so, doesn't mean it will always go up. 10 years is nothing in financial markets."
Bitcoin is volatile as it is so early, and still finding its price point. This will go on for some time - as you say, 10 years is nothing. 
When assessing something as a store of value, the price fluctuations when its in its infancy are not the metric with which it is assessed. 
A good store of value is simply transmissable over space, and time. 
The best store of value we have ever had is gold. 
Bitcoin is better at transmitting over time as the supply schedule is fixed at a rate more consistent than gold, and bitcoin is scarcer.
Bitcoin is better at transmitting over space as you do not need to physically transfer it, unlike gold. 

"A good store of value is simply transmissible over space, and time".  Am I listening to Michael Saylor haha? Sorry but this makes no sense. A store of value is simply when the purchasing power of your money is retained over time.

If you bought Bitcoin at the peak of around 60k, you would have lost 50% of your purchasing power within just a few months. 

The only reason that people call BTC a store of value is because its price has trended up in the long-term. But just because it's trended upwards over the long-term (if you call 10 years long-term for a new asset), doesn't mean it will go up forever.

I am almost 100% convinced that BTC will not succeed - I could essentially write a novel detailing all of the reasons and its flaws. I guess time will tell.

People call bitcoin a store of value for a few reasons:
1. It's deflationary: there's a finite amount and as more coins are mined the cost of mining increases. 
2. It's expensive and slow to trade: It's not viable for general purchases therefore it's main use is not in purchasing.
3. It's seen as a gateway cryptocurrency: Because it's the most abundant and accessible cryptocurrency, people often keep bitcoins in storage and then use them to buy other cryptocurrencies. 

Ryan

People call bitcoin a store of value for a few reasons:
1. It's deflationary: there's a finite amount and as more coins are mined the cost of mining increases. 
2. It's expensive and slow to trade: It's not viable for general purchases therefore it's main use is not in purchasing.
3. It's seen as a gateway cryptocurrency: Because it's the most abundant and accessible cryptocurrency, people often keep bitcoins in storage and then use them to buy other cryptocurrencies. 

You can call it a store of value for whatever reason you choose. That doesn't mean it's a store of value. The definition of a store of value is: "A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved".

Bitcoin is now down to 27.5k from a high of around 60k just a few months ago.

Lentils are up 107% in the last year, Bitcoin is down 35%. Lentils are a better store of value than Bitcoin!

Obviously this is facetious, but it highlights how ridiculous the "store of value" argument is. A store of value is not something that can lose 65% of its value within a few months, it's simply a highly speculative risk asset.

"A good store of value is simply transmissible over space, and time".  Am I listening to Michael Saylor haha? Sorry but this makes no sense. A store of value is simply when the purchasing power of your money is retained over time.
In the above, you are saying the exact same thing that I am. By saying it's transmissible over time, I am saying that it will retain its purchasing power over time. 
You are measuring bitcoin's volatility in the short term. If you go longer, and compare against other stores of value, you will see that it beats them all. Even at the goal inflation rate, your money is losing value always, over time. 
Gold's value peaked 40 years ago, it has also declined severely in purchasing power terms over the long term. 
Your argument of bitcoin losing purchasing power by half is a measurement over a matter of months. A store of value is not measured in months. 
In any case, even if you continue with that viewpoint, Bitcoin is still in the early adopter phase, and will settle as more capital flows in - a lot more capital. 
It's probably more useful if you think of bitcoin as the unit of account here. It's the most consistent store of value we have in that respect - it's supply is fixed and constant, and cannot change. Nothing else has ever been like that. 
In that respect it makes more sense to put it on the other side of the axis: Bitcoin does not go up or down, it stays fixed, and the other more erratic commodities are the ones that go up or down against it. 
From that viewpoint, the dollar is currently up against bitcoin, rather than bitcoin being down. But that will change again soon, because the dollar is always trending down, as represented by inflation statistics. Even the goal inflation rate for nation states/central banks of 2% sees the dollar trending down overall - that is their actual preference. 

Ryan

People call bitcoin a store of value for a few reasons:
1. It's deflationary: there's a finite amount and as more coins are mined the cost of mining increases. 
2. It's expensive and slow to trade: It's not viable for general purchases therefore it's main use is not in purchasing.
3. It's seen as a gateway cryptocurrency: Because it's the most abundant and accessible cryptocurrency, people often keep bitcoins in storage and then use them to buy other cryptocurrencies. 

Only no.1 is correct here in my opinion.
Re: 2: Layer 2 solutions like the Lightning Network are the enabler for everyday purchasing, down to a micro level. The "crypto bros" will tell you that off-chain transactions are not the future but they are wrong. I have seen no solutions to this issue in other "cryptocurrencies" that do anything but centralise, and defeat the entire purpose. 
Re: 3: That is how the "crypto" world sees Bitcoin, but I believe they are wrong. As layer 2 solutions proliferate, it will be far more useful to directly spend the best unit of account, rather than mess about with middle-man, centralised "cryptocurrencies". Your cold storage/node storage will be your savings account. Your Lightning wallet will be your cash in your pocket. 
EDIT: Just realised 1 is not quite correct either. If the cost of mining increases it is likely to be related to the cost of energy, and how many miners are competing to secure the network. Any cost increase in mining is not tied to the number of coins whatsoever (or the number of transactions for that matter). As the mining reward drops, we could well see the hashrate drop, therefore the difficulty adjustment drops, and therefore the cost of mining decreases. We correlate the amount of bitcoin with a cost increase simply because demand tends to go up at the time of the halving. 

Ninja

Ryan

People call bitcoin a store of value for a few reasons:
1. It's deflationary: there's a finite amount and as more coins are mined the cost of mining increases. 
2. It's expensive and slow to trade: It's not viable for general purchases therefore it's main use is not in purchasing.
3. It's seen as a gateway cryptocurrency: Because it's the most abundant and accessible cryptocurrency, people often keep bitcoins in storage and then use them to buy other cryptocurrencies. 

You can call it a store of value for whatever reason you choose. That doesn't mean it's a store of value. The definition of a store of value is: "A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved".

Bitcoin is now down to 27.5k from a high of around 60k just a few months ago.

This is a good definition.
But you are taking an extra leap by defining it in terms of months, and during the early adoption phase of a brand new technology.
In a previous post, you said " Just because BTC has trended upwards for 10 years or so, doesn't mean it will always go up. 10 years is nothing in financial markets."
So before, 10 years was too short to measure it's worth as a store of value. Now you are saying a change in a matter of months is enough to come to a conclusion about it's worth as a store of value?
Lets apply this definition to the other stores of value. The dollar (NZ and US and whomever's) is consistently declining in value, and that is the stated goal of central banks.
Gold peaked a long time ago in terms of purchasing power.
So are you saying the best stores of value are expected to lose value over time?
Do you think we have found the best ever money already, in fiat currency (which is and undefined amount of paper certificates that used to directly represent gold, but have now had the representation severed, and are instead backed by oil and military power)? Do you think that is the best that human civilisation can do? 

paulm

Ninja

Ryan

People call bitcoin a store of value for a few reasons:
1. It's deflationary: there's a finite amount and as more coins are mined the cost of mining increases. 
2. It's expensive and slow to trade: It's not viable for general purchases therefore it's main use is not in purchasing.
3. It's seen as a gateway cryptocurrency: Because it's the most abundant and accessible cryptocurrency, people often keep bitcoins in storage and then use them to buy other cryptocurrencies. 

You can call it a store of value for whatever reason you choose. That doesn't mean it's a store of value. The definition of a store of value is: "A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved".

Bitcoin is now down to 27.5k from a high of around 60k just a few months ago.

This is a good definition.
But you are taking an extra leap by defining it in terms of months, and during the early adoption phase of a brand new technology.
In a previous post, you said " Just because BTC has trended upwards for 10 years or so, doesn't mean it will always go up. 10 years is nothing in financial markets."
So before, 10 years was too short to measure it's worth as a store of value. Now you are saying a change in a matter of months is enough to come to a conclusion about it's worth as a store of value?
Lets apply this definition to the other stores of value. The dollar (NZ and US and whomever's) is consistently declining in value, and that is the stated goal of central banks.
Gold peaked a long time ago in terms of purchasing power.
So are you saying the best stores of value are expected to lose value over time?
Do you think we have found the best ever money already, in fiat currency (which is and undefined amount of paper certificates that used to directly represent gold, but have now had the representation severed, and are instead backed by oil and military power)? Do you think that is the best that human civilisation can do? 

Fiat currencies are certainly not a good store of value over time. This is perhaps largely due to central banks adopting positive inflation targeting regimes (i.e. defining price stability as a 1-3% yearly increase in the All Groups CPI). However, you can be certain that a fiat currency, in most scenarios, will not lose 10% of its value within 24 hours. All things considered, the NZD is a fairly stable currency. At least the G10 fiat currencies have been depreciating at a fairly predictable rate over the last 50 years (measured by the CPI, for example).

Not to say I'm a proponent of fiat currencies, but they are a better means of transactions than BTC. Fiat currencies will probably collapse at some point too, and give way to CBDCs, or a 'Bancor-type' supranational currency as proposed by Keynes.

(Disclaimer: this is just my personal opinion)

An interesting point to consider: What benefits does the average person actually get from the central bank goal of a slow reduction in purchasing power? 
And slow is a relative term here too. If the central banks achieve their goals, and I hold $100,000 in an account for a period of one year, then that will only be worth $98,000 at the end of it. Having $2,000 taken off me in 12 months is not something I find particularly palatable - for someone with no real investment experience or knowledge, this essentially forces me into investing rather than saving. 
Obviously right at this moment this is much much worse than 2%, and personally I cannot see how they are going to reign it in at this point. When asked at a recent talk about how the European Central Bank was going to fix the situation they have created by flooding europe with newly printed money, Lagarde offered no answer other than "It will come, in due course". 
I've just finished reading "When Money Dies", an account of Weimar Germany, and the parallels are insane. No one even considered the possibility of money printing being the issue at that time, and no one is considering that possibility right now. 
I would not be surprised at all to see some of the world's biggest currencies start to hyperinflate soon. And that could spell real trouble. 
CBDCs are the new Fiat, and will suffer all the same issues. Bitcoin will be to CBDCs what gold was to fiat in times of trouble in the past. But Bitcoin will usurp gold, because it is far more convenient to use in societies where CBDCs will not be rolled out effectively, or at all. 
I often say that Bitcoin will sweep the world "top down, bottom up". Top being the rich investors in developed countries, who want bitcoin as they see an opportunity, and bottom being those who want bitcoin because they need it - they either have no access to banking at all, or they have access to weak, hyperinflating currencies. I think the bottom will bring bitcoin in faster. We're seeing it play out already, with El Salvador and the Central African Republic. Who will be next? Lots of chat about Tonga. And 44 different countries (some of the poorest in the world) sent representatives to the recent bitcoin meeting held in El Salvador, to learn about it. 
Whatever our respective opinions, it's going to be very interesting to watch all this play out!

Ninja

paulm

Ninja

Ryan

People call bitcoin a store of value for a few reasons:
1. It's deflationary: there's a finite amount and as more coins are mined the cost of mining increases. 
2. It's expensive and slow to trade: It's not viable for general purchases therefore it's main use is not in purchasing.
3. It's seen as a gateway cryptocurrency: Because it's the most abundant and accessible cryptocurrency, people often keep bitcoins in storage and then use them to buy other cryptocurrencies. 

You can call it a store of value for whatever reason you choose. That doesn't mean it's a store of value. The definition of a store of value is: "A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved".

Bitcoin is now down to 27.5k from a high of around 60k just a few months ago.

This is a good definition.
But you are taking an extra leap by defining it in terms of months, and during the early adoption phase of a brand new technology.
In a previous post, you said " Just because BTC has trended upwards for 10 years or so, doesn't mean it will always go up. 10 years is nothing in financial markets."
So before, 10 years was too short to measure it's worth as a store of value. Now you are saying a change in a matter of months is enough to come to a conclusion about it's worth as a store of value?
Lets apply this definition to the other stores of value. The dollar (NZ and US and whomever's) is consistently declining in value, and that is the stated goal of central banks.
Gold peaked a long time ago in terms of purchasing power.
So are you saying the best stores of value are expected to lose value over time?
Do you think we have found the best ever money already, in fiat currency (which is and undefined amount of paper certificates that used to directly represent gold, but have now had the representation severed, and are instead backed by oil and military power)? Do you think that is the best that human civilisation can do? 

Fiat currencies are certainly not a good store of value over time. This is perhaps largely due to central banks adopting positive inflation targeting regimes (i.e. defining price stability as a 1-3% yearly increase in the All Groups CPI). However, you can be certain that a fiat currency, in most scenarios, will not lose 10% of its value within 24 hours. All things considered, the NZD is a fairly stable currency. At least the G10 fiat currencies have been depreciating at a fairly predictable rate over the last 50 years (measured by the CPI, for example).

Not to say I'm a proponent of fiat currencies, but they are a better means of transactions than BTC. Fiat currencies will probably collapse at some point too, and give way to CBDCs, or a 'Bancor-type' supranational currency as proposed by Keynes.

(Disclaimer: this is just my personal opinion)

Not to nit-pick ;) But I assume you mean only the most established and powerful fiat currencies when you say they won't lose 10% in 24 hours? Nearly every fiat currency that has ever existed, has indeed lost more than 10% in 24 hours. Only a handful of the current world leading currencies have yet to do it.
I see the other day Malawi officially announced that their currency was being devalued 25% in one swoop - that one is on its way to its death soon. 
So we've agreed that fiat currencies are not good stores of value.
I am claiming that gold is no longer a good store of value.
You are claiming bitcoin will not be a good store of value.
So what exactly is a good store of value? What is left? 
Real estate? Lego? 

Magic: The Gathering cards. 

paulm

Ninja

paulm

Ninja

Ryan

People call bitcoin a store of value for a few reasons:
1. It's deflationary: there's a finite amount and as more coins are mined the cost of mining increases. 
2. It's expensive and slow to trade: It's not viable for general purchases therefore it's main use is not in purchasing.
3. It's seen as a gateway cryptocurrency: Because it's the most abundant and accessible cryptocurrency, people often keep bitcoins in storage and then use them to buy other cryptocurrencies. 

You can call it a store of value for whatever reason you choose. That doesn't mean it's a store of value. The definition of a store of value is: "A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved".

Bitcoin is now down to 27.5k from a high of around 60k just a few months ago.

This is a good definition.
But you are taking an extra leap by defining it in terms of months, and during the early adoption phase of a brand new technology.
In a previous post, you said " Just because BTC has trended upwards for 10 years or so, doesn't mean it will always go up. 10 years is nothing in financial markets."
So before, 10 years was too short to measure it's worth as a store of value. Now you are saying a change in a matter of months is enough to come to a conclusion about it's worth as a store of value?
Lets apply this definition to the other stores of value. The dollar (NZ and US and whomever's) is consistently declining in value, and that is the stated goal of central banks.
Gold peaked a long time ago in terms of purchasing power.
So are you saying the best stores of value are expected to lose value over time?
Do you think we have found the best ever money already, in fiat currency (which is and undefined amount of paper certificates that used to directly represent gold, but have now had the representation severed, and are instead backed by oil and military power)? Do you think that is the best that human civilisation can do? 

Fiat currencies are certainly not a good store of value over time. This is perhaps largely due to central banks adopting positive inflation targeting regimes (i.e. defining price stability as a 1-3% yearly increase in the All Groups CPI). However, you can be certain that a fiat currency, in most scenarios, will not lose 10% of its value within 24 hours. All things considered, the NZD is a fairly stable currency. At least the G10 fiat currencies have been depreciating at a fairly predictable rate over the last 50 years (measured by the CPI, for example).

Not to say I'm a proponent of fiat currencies, but they are a better means of transactions than BTC. Fiat currencies will probably collapse at some point too, and give way to CBDCs, or a 'Bancor-type' supranational currency as proposed by Keynes.

(Disclaimer: this is just my personal opinion)

Not to nit-pick ;) But I assume you mean only the most established and powerful fiat currencies when you say they won't lose 10% in 24 hours? Nearly every fiat currency that has ever existed, has indeed lost more than 10% in 24 hours. Only a handful of the current world leading currencies have yet to do it.
I see the other day Malawi officially announced that their currency was being devalued 25% in one swoop - that one is on its way to its death soon. 
So we've agreed that fiat currencies are not good stores of value.
I am claiming that gold is no longer a good store of value.
You are claiming bitcoin will not be a good store of value.
So what exactly is a good store of value? What is left? 
Real estate? Lego? 

G10 currencies as in: USD, NZD, AUD, EUR, JPY, etc.. I agree, fiat currencies are not a good store of value, but that is not their purpose. Their purpose is mostly as a medium of exchange and unit of account to support and facilitate economic activity.

I would actually argue that gold is a good store of value. It's held it's value relatively well for centuries. I would also argue that real estate and land are decent stores of value too, although both are subject to volatility and potential boom/bust cycles.

I think a gold-backed digital currency (issued and supported by central banks) would probably be better than fiat currencies. A digital currency pegged to gold would almost certainly hold its value better than fiat currencies.

But thats exactly what fiat currency was right?
That is why it was successful, initially, until the government debased it and debased it, and then eventually severed the peg to gold altogether. And now were so used to that, that you are even saying that fiat currencies are not *supposed* to be stores of value, when thats *exactly* what they were expected to be, and what they were, when they were created. They were simply a way of making the store of value more easily transmissible, they were never intended to *not* be a store of value. 
I completely agree that gold was/is a decent store of value - the best we ever had until bitcoin. That's why the fiat currencies were backed by it. 
But like every other government in history, all our current governments could not resist the temptation to print money (clip coins) to get themselves out of sticky situations, which is what broke that peg to gold. And now they have done it so much we have normalcy bias about it.
You are saying we should essentially create the same currencies again, that we already had, for what? So they can do it all over again? Do you trust them not to? There is zero historical basis for that level of trust. Humans simply cannot manage it, it's too tempting to just print more. And with a CBDC it gets even easier. Yes they can program in some scarcity, but they can't enforce that as the government will hold the keys to it. The first government that does it might stick to it, but the next government that encounters economic difficulty will immediately look to increase the supply, that's how it always pans out. 
This is why bitcoin will win. It takes those policy decisions out of untrustworthy hands (humans), and gives it to simple, unbreakable, mathematical equations. 

Another interesting thing to ponder is that when fiat currency first came in, it was greeted with much the same scepticism as bitcoin is now. Can you imagine it?
"We just use paper??? Thats madness! Its just paper! How can we trust it???"
It took 400 years for paper money to properly catch on and be trusted. It was a technological innovation off the back of the printing press, it was new, it was different, and it was scary. 
The best way to understand bitcoin in my opinion is to study monetary history. We are completed clouded in the normalcy of what we have come to expect in our current financial environment. It is ripe for disruption by new technology, and that technology is here. 

paulm

Another interesting thing to ponder is that when fiat currency first came in, it was greeted with much the same scepticism as bitcoin is now. Can you imagine it?
"We just use paper??? Thats madness! Its just paper! How can we trust it???"
It took 400 years for paper money to properly catch on and be trusted. It was a technological innovation off the back of the printing press, it was new, it was different, and it was scary. 
The best way to understand bitcoin in my opinion is to study monetary history. We are completed clouded in the normalcy of what we have come to expect in our current financial environment. It is ripe for disruption by new technology, and that technology is here. 

You are right - the financial and banking sectors are ripe for disruption. The technology is here to improve the efficiency of the payments infrastructure. But, the solution is not bitcoin.

Bitcoin can only process ~10 transactions per second. Visa, in comparison, can process up to 60,000 transactions per second. Bitcoin requires an antiquated, and outdated, system for processing transactions (mining), using expensive hardware, massive amounts of infrastructure investment, and unbelievable energy expenditure/waste. The last figure I saw was that Bitcoin uses as much energy as the Czech Republic - and this is an asset that is hardly used as a medium of exchange on a global scale.

Why would we build the future of money around a system that: a) cannot support the world's demand for transactions; b) cannot be integrated into the existing financial system (i.e. lack of transparency and failure to adhere to KYC/AML requirements that all banks must comply with); c) is grossly inefficient and wastes an incredible amount of energy resources; d) is one of the most volatile assets that is widely traded and with a large market cap; e) is 'maintained' by a very small number of developers who could, if they decided to, alter the source code; f) there are better and more efficient technologies out there (not Ethereum), g) etc, etc, etc, etc (these are just a few thoughts off the top of my head).

You say Bitcoin will win. How will it win? And by what metric?

It's not going to be adopted by the key institutions that would legitimise it as a global currency - i.e. central banks, IMF, governments, etc. It's going to come under heavy fire by government due to its influence on the climate.

So if Bitcoin is a terrible medium of exchange, what is its role? As a store of value..? How can it be a store of value when it's decreased over 50% within the last few months? How can it be a store of value when its price can fluctuate by over 10% on certain days? How can it be a store of value if it's highly correlated to other asset markets, and is only backed by the demand of speculators (and a very very small amount of institutions, who I would argue are mostly within the speculator basket, such as Microstrategy). Once confidence is lost in the asset, it will no longer be a "store of value", it will be worthless.

Bitcoin is kind of like the first computers, that took up an entire room, were unbelievably expensive to operate, and could only perform very basic operations. Nobody is using the first computers invented to this day. Similarly, it could be compared to the Ford Model T - a great innovation, but not used today.

Bitcoin is only valuable as long as someone is willing to pay more for it than you purchased it for. The tables will turn on bitcoin at some point and it will not be adopted on a global scale. That, I am almost certain of.

So bitcoin is now down 65% from its high, and down 12% today alone. Remind me again how an "asset" that declines 65% in value over a few months is a store of value? That's 65% of your purchasing power wiped out within months.

Interesting seeing the announcement by Celsius exchange yesterday to freeze all withdrawals and trading. Is this a rug pull and assets held on there are gone? I did look at is as interest rates for staking were quite good but thankfully didn't end up putting anything in there. As mentioned I don't have a large amount, and have it split between 3 different exchanges in staking/earn accounts to reduce the risk of losing all of it at once. But the Celsius action is concerning as it further reinforces that idea of "not your keys, not your crypto." Should probably start looking into hardware wallets.

Yes ajc! You got it mate. 
If you don't have keys, you don't have bitcoin, all you have is an IOU from someone you are trusting! 

Could be it's the same as a run on the banks I'd imagine, they have a lot of their crypto in storage and don't have enough crypto live to meet demand.

Or, it's another Mt Gox situation where they physically don't have enough assets to back the crypto they hold.

 

Ninja, you’ve covered a lot of points swiftly there. I need proper time to address them separately – I’ve spent the past two years basically researching all the points you raise, as those were all my first thoughts as well. It’s not possible to explain or understand them that quickly, so I’ll outlay the results of my research and understanding carefully, one by one, as my time permits. 

 

Here’s the breakdown of your points from your comment; 

 

Why would we build the future of money around a system that: 

a) cannot support the world's demand for transactions 

b) cannot be integrated into the existing financial system (i.e. lack of transparency and failure to adhere to KYC/AML requirements that all banks must comply with) 

c) is grossly inefficient and wastes an incredible amount of energy resources 

d) is one of the most volatile assets that is widely traded and with a large market cap 

e) is 'maintained' by a very small number of developers who could, if they decided to, alter the source code 

f) there are better and more efficient technologies out there (not Ethereum), g) etc, etc, etc, etc (these are just a few thoughts off the top of my head). 

And I will add in your question later in your post; 

You say Bitcoin will win. How will it win? And by what metric? 

 

So here is my first response, to a) 

 Visa is a 2nd layer solution on top of the SWIFT banking system (the 1st layer, or settlement layer). 
 So you can equate SWIFT to Bitcoin for a neat comparison, as Bitcoin is a settlement layer. On that comparison, Bitcoin is more than capable of matching the speed and efficiency. A settlement will settle on the bitcoin blockchain within an hour at the lowest fee (quicker if you choose a higher fee), as opposed to the SWIFT banking system, which sits somewhere in the region of 8 days.
 On the second layer of our current financial system, you have VISA, Mastercard, Paypal etc. They essentially plug into SWIFT and promise the liquidity, so that you can settle payments instantly, anywhere, without having to wait 8 days for SWIFT to do it. 
 That is where the Bitcoin Lightning Network comes in, which is the first successful 2nd layer solution for the Bitcoin blockchain. It is an ingenious design where anyone can participate by setting up routing channels using their own liquidity (I have done this, it's quite easy and fun). With enough people setting up with these channels, it creates a 2nd layer on top that plugs into the Bitcoin layer beneath, and enables instant, low fee transactions, via any number of Lightning Wallets (try WalletofSatoshi from your app store as an example, a nice simple one to use). This is how people are transacting, day to day, in retail outlets around the world that accept bitcoin, and in places like El Salvador where Bitcoin is fairly widely accepted. It's quite amazing to use, virtually instant (much quicker than eftpos etc), and has incredibly low fees. I play around with it a lot, very fun. 
 The Lightning Network easily scales exponentially larger than the likes of Visa, it is capable of far more than 60k transactions per second, and with lower fees and infrastructure costs. 
 Bitcoin beats SWIFT at the first layer, with ease.
 Lightning beats Visa/Mastercard etc at the second layer, with ease. 

“Crypto” guys will tell you this is cheating as its not “on chain” when you transact via Lightning, but I believe they are completely misguided. To have all transactions on-chain, you need an enormous, unwieldy, centralised blockchain. I cannot see that happening via Proof-of-Work consensus. I believe the future is that the innovation and amazing products happen on the second layer, and the Bitcoin blockchain is a basic base layer. More similar in function to the Internet Protocol – that is what we use to connect the internet together, but all the awesome apps etc are built on the next layer, utilising the protocol, which never changes. 

 

There will be far better to come on this layer, far far better. Lightning is first as a successful transaction layer, but other clever cookies will come up with better. Having said that, as it currently stands I don’t see a need for anything better than Lightning, it’s fantastic. If someone beats that soon it will be mindblowing. 

Ryan

Could be it's the same as a run on the banks I'd imagine, they have a lot of their crypto in storage and don't have enough crypto live to meet demand.

Or, it's another Mt Gox situation where they physically don't have enough assets to back the crypto they hold.

I'd say you are spot on here. When a market crashes, you find out which banks/exchanges have been responsible with their investments and holdings, and which haven't. 
This falling market has exposed Celsius first, who for years were giving away absurdly high rates of return, and others are likely to follow. 
Not hearing much noise about Nexo or Crypto.com, but Binance halted trading for an hour yesterday, so some scare there. 
If any of you hold anything on exchanges, I would be getting out to your own storage asap.*
*not financial advice. 

paulm

Ryan

Could be it's the same as a run on the banks I'd imagine, they have a lot of their crypto in storage and don't have enough crypto live to meet demand.

Or, it's another Mt Gox situation where they physically don't have enough assets to back the crypto they hold.

I'd say you are spot on here. When a market crashes, you find out which banks/exchanges have been responsible with their investments and holdings, and which haven't. 
This falling market has exposed Celsius first, who for years were giving away absurdly high rates of return, and others are likely to follow. 
Not hearing much noise about Nexo or Crypto.com, but Binance halted trading for an hour yesterday, so some scare there. 
If any of you hold anything on exchanges, I would be getting out to your own storage asap.*
*not financial advice. 

The Celsius situation is interesting...Lots of "chatter' that there was/is a concerted effort by some of the "crypto mafia" (some well known funds/exchanges/individuals) to take them out as "payback". 
Why? Allegedly during the $UST/Luna crash some entities (including Celsius) were discussing how to save #UST/Luna but Celsius front ran the other entities to exit first, so the others have now incurred $several hundered million+ in losses/potential insolvency. Who knows but has some plausability however I also think its very possible their been  "irresponsible behaviour" by celsius & others in their risk management. We'll see in due course but for customers thats always the very real risk of "not your keys....."   Believe Celsius have been regularly adding liquidity to their loan positions & understand their BTC liquidation price is now about $14k. I dont think the fall-out from the Terra collapse, Celsius situation, 3AC insolvency? is over & the contagion effect among other exchanges etc is very high risk event.

One of the beauty of the blockchain is transparancy & knowing/seeing what other entities are doing. This can also provide targets & levels for others to aim for to liquidate etc. Another plus is that unlike in traditional markets there is no-one who is going to come & bail someone out with taxpayers money or printing more currency etc. Harsh but thats how it is. 

For me the global macro environment is far more scary as to what is coming down the line (anyone checked on Japan lately) & what it will mean to the average joe than any BTC/Crypto volatility (which I expect some considerably more volatility & potential downside)

Paulm, firstly SWIFT is not a "banking system". It's a global messaging system. No money is transferred or settled via SWIFT, money is settled on individual banking ledgers.

Secondly, bitcoin is not widely accepted in El Salvador, and if it is, it's being converted instantly back to USD because businesses cannot operate with such uncertainty as to the value of their "money" on a day-to-day basis.

Lightning network attempts to settle transactions off-chain. I can see many flaws with this method. One of the interesting things about LN, that goes against the bitcoin proponents' dogma, is that it's actually a centralised system. 

At this point in time bitcoin is under $19,000. As far as I'm concerned, it's toast. It's had its dash, and it's time might just be up. 

I don't mean to be snarky, but I'm sure you can admit now that the "bitcoin is the greatest store of value" and "bitcoin is the greatest hedge against inflation" arguments are nonsense. Annual consumer price inflation in the U.S. is over 8%. bitcoin is down around 45% in the last year. The real returns of bitcoin in the last year is ~-53%.

It gets worse.  Bitcoin is down over 70% from its high less than a year ago. It's not a store of value, it has no underlying value, it's essentially a sophisticated ponzi scheme.

Hahaha I know you are very convinced Ninja but I disagree strongly on all points.
Even at this price, Bitcoin has outperformed the S&P 500, Netflix, and most other investments on a 5 year time frame for example. Earlier in the thread you argued that short term price action was not relevant in assessing a store of value, because it went up so strongly in the short term. Now you are arguing that short term price action is in fact proof that it is not a good store, since it has gone down so quickly. You must choose here or it's not a coherent argument. As I've said a few times, you need a 4 year time frame in bitcoin, that is a full cycle. 
As it currently stands, the vast majority of bitcoin holders do not have an innate understanding of what it is they hold - it is purely a risk asset at the fringe of their portfolio, and so is sold first in a financial market such as this one. 
My argument for bitcoin as a store of value is based upon the principles of the asset itself, not the price action day to day. Everything in its infancy will be volatile until it is properly understood, and then the buying behaviour starts to match up with the actual value proposition of the asset. Our debate right now is proof to me of this - I see where you are coming from, I've had the same thoughts, but I've done deeper research into monetary history and bitcoin itself, to figure these things out, and the results have been positive on the side of bitcoin. 
I very much enjoyed your comment "It's toast, it's had its dash, time might just be up."
I wish I could stamp that right now, let's re-visit it in 2 years time and see if it holds up. It's a common refrain amongst bitcoiners to time stamp these types of claims and re-visit them. It's been proclaimed as dead many many times, and yet here we are. 
Yes on-chain for all transactions would always be preferable in theory but I do not see that as any kind of realistic possibility. No competitors to bitcoin have designed a system that can do this in a way that is sufficiently decentralised, and I do not believe it to be possible. A good sign is that with all the new "crypto currencies" being created now, none are competitors or improvements on bitcoin's fundamentals. They all purport to do other things, and are far more complex. That's because the horse has bolted there - the first wave of "crypto currencies" after bitcoin attemped to beat it and failed, and now the only competitive area in the market is for offering blockchain services that are different to bitcoin, and compete in the space of Ethereum and related things. 
You are incredibly focussed on the aspect of bitcoin that is the "coin" itself, and the fluctuations in value at a time when the world does not yet understand it. But this is just one application of bitcoin, it is so much more. The network that is bitcoin, and the wide ranging implications on finance, are the really important thing here. For example I attended a meetup in the weekend of very intelligent bitcoin thinkers, at the forefront of this in NZ, and the price action and investment side of it was not mentioned once in 4-5 hours. It is literally the last domino to fall in this, and is clouding the judgement of those who are attempting to look into it for the first time. Other "crypto currencies" also serve to cloud this view, given they are so completely different to what bitcoin really is. 
I do realise that I am never going to change your mind, but I do still appreciate your time and attention on this, and the probing at my opinions etc, it's very helpful to me, and I mean that! No snarkiness intended in my posts whatsoever for the record! 

My answer to Point B in your original post;

B) Cannot be integrated into the existing financial system (i.e. lack of transparency and failure to adhere to KYC/AML requirements that all banks must comply with)

 

I have been reading some really good stuff on this sort of point by Andreas Antonopoulos lately (author of Mastering Bitcoin among other things, the first widely recognised bitcoin textbook for developers).

With technological innovations, “integration into existing systems” is a very interesting and oft-misunderstood element, greatly affected by “normalcy bias”. 

For example, when motorcars came in, they were widely criticised because of their early struggles to actually get around on the existing road network. The network at the time was basically a series of muddy, rutted tracks that worked for horses, and there was no traffic control to speak of - it was not necessary due to the slowness of the horses. When motorcars started driving on this network they would frequently get stuck, break their wheels/axles, and have accidents at intersections. The common refrain was that they were useless because they were failing to integrate into the existing system. This is so silly when you think about it now. The existing system was designed for the old technology (horse and cart). It was not ready for a disruptive innovation like the motorcar. Fast forward and this was flipped on its head. The roads were changed to fit the better technology, and then we mostly kept the horses off them. 

These historical examples are everywhere. 

Residential electricity was derided as dangerous as houses were not safely equipped to house the technology – because it didn’t exist when the houses were built. Now we build houses with bigger cavities to house wiring, and safety features to reduce risk of electrical fire. 

Internet struggled to operate at fast speeds through the telephone wiring system, because the telephone system was never built for that technology. The telephone providers derided the internet: “these wires weren’t built for this craziness”. This was flipped on its head – now we wire for the internet, and we build telephone services on top of that instead. 

Furthermore, the new technological innovations have to be dumbed down to fit our normalcy bias, otherwise we struggle to understand them. 

An example is that when the telephone functionality was built onto the internet system, there was an issue where if there was a moment of silence in the conversation, people would hang up, because the complete lack of sound resembled the line being dead. We had a normalcy bias that the line could not possibly be that clear, we were not used to it. So they literally built functionality to introduce a low static noise, so that the participants would not be mistaken in thinking the line was dead! This functionality is still in play today! That’s a great example of us dumbing down new technology so that we can understand it under the terms of our old technology.

That is where bitcoin is now. A bitcoin “wallet” is not a wallet at all. Bitcoin itself is not a coin at all either. We call them these things because that is our normalcy bias – that is how we understand money and value. If we have the mental impression that we have bitcoin in our wallet, then it feels like we have it in the same way as when we have physical money in our wallet. But under the hood, that is not how bitcoin works at all. Even the fact that we all think of bitcoin in terms of its value in dollars is a dumbing down. Bitcoin’s own unit of measure is far far better than that of dollars, it’s more consistent in supply, it offers a better gauge of overall value because of that. But yet we talk about how much it is worth in dollars - our normalcy bias, our safe place. 

So basically, “failure to integrate into the existing system” is not any kind of issue or barrier. And regardless of that, bitcoin integrates into the system just fine. 

I anticipate that we will flip this on its head like the other examples. The current financial system is very easily accommodated on top of bitcoin, and will eventually shift onto it when bitcoin reaches critical mass. 

Regarding the bracketed part, that is all not true. To begin with, don’t conflate anonymity with transparency. Bitcoin is far far more transparent than the current banking system – it’s on a public blockchain. I can see every transaction I ever made on-chain, and so can everyone else. 

Yes it is anonymous, but that’s easily broken down. Blockchain analysis is a fast-growing industry, and they are now working directly with law enforcement to analyse activity on the blockchain. Anyone can do this with a bit of technical ability. Transacting criminally in bitcoin is really silly, and will only be seen as a hallmark of the very early days – just like the internet was in its infancy. 

Once a person is connected with a set of keys, you can connect them to everything they’ve ever done. Other cryptocurrencies (Monero for example) have been specifically designed for anonymity and disguising of transactions, and are the havens of criminals these days (well, the few criminals who don’t just use the fiat system anyway, since that is easier and more accommodating: See HSBC Mexico as a good example).

Regarding KYC compliance, most exchanges and other parties are indeed complying, to be above board, regardless of whether one feels that KYC is necessary (I don’t, but that’s besides the point). For example EasyCrypto, a Wellington based exchange for buying/selling, is fully KYC. I had to provide details to set up my account with them, and they provide the tools for tax reporting etc to IRD, so are completely above board. If I sell my bitcoin at a profit, the record is all there and I am liable for tax on the capital gains. 

The issue you have here is that the governments have been so slow to look at bitcoin (and “crypto”), that they don’t have any regulation set down effectively. Exchanges etc are going above and beyond to try and do what they think they will need to do, while the government catches up. 

In any case, failure to adhere to government laws of any kind is the same in any industry, or with any product/commodity. If you don’t do it, the government will get you, and that’s how it works. Blaming bitcoin for this issue is a bit like blaming cars for unwarranted vehicles. It aint the car’s fault, the owner’s gotta do it, and if he doesn’t, the government will come for him. 

Sorry these responses are so long. It’s very hard to try and get my point across quickly, and I always rabbit on!

I think these next few are fairly quick responses;
c) is grossly inefficient and wastes an incredible amount of energy resources 
This is a subjective opinion. To say something is a waste is simply your personal view.  I don't play computer games therefore I believe the energy expended in that industry is a complete waste. Same with clothes dryers and christmas lights and any number of things I don't indulge in, but that use a vast amount of energy (all these examples use more than the bitcoin network). But I refrain from saying things like that, as these things are obviously more important to others who do not complain about their energy use.
Additionally, and more importantly, bitcoin provides the best use case for uptake of renewable energy, and utilisation of waste energy, providing a carbon-negative outcome. There are schools of thought coming out now, backed by good data, suggesting that bitcoin mining could in fact be the key to shifting the world to renewable energy. That's a new and exciting area of study that I will hopefully be able to talk more about as I get more in-depth on it.
I've written plenty on the energy use aspect of bitcoin so will not go any further, you can see my previous posts for more views on this if you want to. 
d) is one of the most volatile assets that is widely traded and with a large market cap 
I've just spoken about this at length but essentially it's in its infancy, I expect it to be volatile for some time yet, until it becomes more widely understood. 
e) is 'maintained' by a very small number of developers who could, if they decided to, alter the source code 
This is not true. Consensus must be gained by the network to introduce changes. The bitcoin improvement proposal process is how changes are made, and the market talks when it comes to changes. The blocksize war of 2015-17 was the ultimate proof of this sort of point - large individual players desperately wanted changes that would help them personally, but the individual low level node operators out-voted them and prevented this. 
If this was possible then bitcoin most certainly would have been killed off already, by nation state (or financial organisation) corruption of these individuals supposedly capable of changing the code by themselves. 

"Even at this price, Bitcoin has outperformed the S&P 500, Netflix, and most other investments on a 5 year time frame for example. Earlier in the thread you argued that short term price action was not relevant in assessing a store of value, because it went up so strongly in the short term. Now you are arguing that short term price action is in fact proof that it is not a good store, since it has gone down so quickly. You must choose here or it's not a coherent argument. As I've said a few times, you need a 4 year time frame in bitcoin, that is a full cycle."

Paulm, let me be clear. An asset that can frequently fluctuate 10% in daily returns is NOT a store of value. No business can function with a "currency" that fluctuates to that degree. Bitcoin is only a "store of value" insofar that it continues to increase in price. I'm not convinced it will ever break it's all time high (it may do, but I know that eventually it will be worthless. Just goes to show the unpredictability, and casino-like characteristics of Bitcoin).

I was on twitter the other day and some guy was citing that Hex is superior to bitcoin because it has achieved returns of 100,000% in the last year or so. Meanwhile, the price of Hex is down 90% from it's all time high. The reality is, it was probably almost impossible to purchase Hex at its all time low (or near to it) to achieve these sorts of gains (due to illiquidity etc), and even if you did manage to capture some of this, you're exposing yourself to enormous risk. There is no return without risk.

Why 4 years? Who decided it was a 4 year cycle? You have a sample size of 2.. 2 and a bit "4 year cycles". You cannot make any credible statistical or empirical deduction with a sample size of 2. If only it were that easy to predict to the date when asset market cycles occurred, we'd all be billionaires.

"I very much enjoyed your comment "It's toast, it's had its dash, time might just be up. I wish I could stamp that right now, let's re-visit it in 2 years time and see if it holds up."

The good news is that this is time stamped. So we'll be able to come back in 2 years, or 5 years, or 10 years, and both see that Bitcoin was a ponzi scheme that went to $0.

"The network that is bitcoin, and the wide ranging implications on finance, are the really important thing here. For example I attended a meetup in the weekend of very intelligent bitcoin thinkers, at the forefront of this in NZ, and the price action and investment side of it was not mentioned once in 4-5 hours."

It has no implications on "finance". You may be meeting with "very intelligent bitcoin thinkers", but these people are not at the forefront of the financial industry in New Zealand. Bitcoin is not even a passing thought amongst the key decision makers in the financial industry in New Zealand, and globally. And if it is, it's in a negative light. 

Bitcoin is literally a casino and it's underlying value is $0. I just hope some people manage to get out before this house of cards collapses.

Let me pose this question to you. Why do you think Bitcoin is the ultimate asset, when XRP (as a random example) outperforms Bitcoin on almost every metric. Transaction finality in ~3 seconds, 5,000-10,000 transactions per second, almost 0 energy expenditure, integration with the existing financial system, etc. I am not an XRP proponent, but it is technologically superior to Bitcoin on every metric, and by a long way. The only argument against it is that it is "centralised". Well fiat currency is centralised as well. The reality of the world that we live in is that there will be centralisation. A purely decentralised society is simply lawlessness and anarchy. Centralisation, and structure, is important for a well-functioning society. Society wouldn't exist without centralisation. 

It's sad that this space is run by charlatans like Michael Saylor who tell you to take out as much leverage as possible (mortgage on your house, business, loans, debt, etc) to buy bitcoin, and then take out more loan on that "collateral" to live off. It's very sad because many many people are going to be financially ruined when this bubble burst and the true value of Bitcoin is revealed, which is $0.