9% dump so far and why this is actually a good thing.
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This could be the halving correction, the next few weeks
It was always highly likely to slide downward before the halving. This might be the last chance to buy more (depending how low it goes - and I'd be highly surprised if it corrected to that large a degree that people who haven't already got a position were tempted to take one).
Smart contracts are a necessary thing. Even if all of the existing smart contract cyrptos fail in the future something else will be created to enable it. Or perhaps smart contracts will migrate to Bitcoin. But either way smart contracts are a real need and use case as they would hugely reduce friction in commerce. Think about the process and paperwork involved in settling the purchase of a house for example. How much cheaper and easier would it be executed on a smart contract platform using the relevant token. Same as settling trades for purchases and sales of stocks. Or do you believe smart contracts have no utility?
This is a value. In the unbacked/fiat vs. backed monetary base argument. We know fiat money works. What does not work is the centralised controllers. But an unbacked currency only has value if it can be tied to real wealth. And Bitcoin is mostly not used to exchange real wealth. It's mostly used as a speculative vehicle by people with no understanding of basic economics.
I am aware that banks operate like that, and that Bitcoin also has to operate like that. As it is too slow for its intended purpose. But there are new chains that can do what Bitcoin can only do with a sidechain on the base chain. I am open to criticism of these chains. Maybe there is some issue with them that will arise. But I'm not seeing that specifically targeted by, say, Bitcoin maxis. One query is whether it is absolutely imperative to have a chain that is slow for security purposes. e.g. if transactions are finalised within 1 second, it makes sense that is a vector for abuse. But it also makes sense that is an aspect that can also be resolved. The answer should be resolved by the end of 2025, either way.
It appears there is no scaling for Bitcoin and that most Bitcoin proponents aren't able to knowledgeably answer questions on this topic. LN is a separate network that writes to Bitcoin and there is plenty of evidence of it's very low-level security being compromised.
Bitcoin has adoption in terms of network participants and holders and gamblers. It is the most secure monetary system ever created. But it has little adoption in terms of use for real economic activity. Adoption under government direction in El Salvador is very low. But scaling Bitcoin is very difficult. As seen with Ethereum scaling (which is very limited), it takes them a long time to test, let network participants know a change is coming, and then have hardware providers shift over. While also being backward compatible, which is the biggest killer. e.g. when Ethereum has hard forked, it requires every exchange to make updates and probably 100,000s of network participants to make changes.
TCP/IP is a protocol, a set of rules that is not limited by hardware or software limitations. Saylor and others say BTC is a protocol. It is a protocol (a set of rules), but it's also distributed software, which is where most of the limitation comes in. Most people involved with Bitcoin don't want to understand this and it's behind Ethereum in so-called scaling. The BTC core devs also seem unwilling to make any changes.
TCP/IP is being replaced by another protocol - https://visualitynq.com/resources/articles/will-quic-replace-tcp/
Pretty much any polished project is lead by believers - Solana, Sui, Sei, even Cardano. There are VCs involved with some projects, or early investors, many of whom will sell their coins. But there are also true believer VCs. Some projects just have open investment rounds. I don't see anything particularly wrong with that. They need capital to operate. Then there are also fair-launch projects like Qubic and SPACE. At the end of the day, I don't think it makes too much difference how a project gets funded, what matters is can they solve the problems that BTC and ETH have not, and can they gain adoption for real economic activity. If they can do that, then the nature of their funding does not make much difference.
Bitcoin would need that blockchain technology on top of it to justify its speculative valuation. Over the next two years there will be at least tens of billions of transactions on-chain for gaming and AI, i.e. not gambling. Bitcoin will likely crash 70-80% again in 2026. The reason being that ~99% of its value is speculative. If Bitcoin was necessary for billions of this growing economic activity, then those crashes would be less severe and it would be much more easy to justify the value of Bitcoin. But virtually all of that activity will use other tokens, L1s.
The prospect for massive real economic activity via AI is huge. It's a relatively new space with a lot of open data and software; crypto-AI projects will have billions at their disposal next year. But about 0% of the currency that will be used in that is Bitcoin or a derivative.
I have raised the point before and I will raise it again because it hasn't been answered. Apart from some small scale forms of money like Cowrie shells, etc or fiat which was force-ably imposed basically at gunpoint in general money has always been some type of commodity with intrinsic value such as gold, silver, copper, cocoa beans, salt, cigarettes, etc. Because people naturally want to store something that is useful and if enough people start storing it that causes it to become money. Even if most gold is never used for industrial purposes or jewellery the fact that it could be if needed underpins much of the value of the investment gold. So why is it that Bitcoin maxis think its a positive thing that Bitcoin is pure monetary premium? You know what else is pure monetary premium? Fiat.
Rai stones (Yap), glass beads (Africa), there are many examples of non-useable, non-consumable proto money. Even gold basically had no use. Jewelry was a way of keeping gold available and transportable. Aesthetics were a secondary use, but not primary (in most cultures).
Oil is incredibly useful…plastics, lubrication, fuel, pharmaceuticals, fertilzer…way more useful than gold. But it never became money because why would you store something so incredibly useful. It is much more valuable to consume it and create more value with it.
Gold has very limited utility uses. It has some, but for the most part, that is not what gives it value. If a commodity is not consumed, its supply continues to increase. Gold became money because its supply always grew, while only a tiny fraction was consumed. Thus if the price of gold increases, the amount that can be mined is a drop in the ocean compared to how much exists…a low inflation rate.
If oil started to monetize because someone wanted to use it as money, any price increase would signal to the market to drill for more, and the total available supply would double in a year, because annual storage = annual production. A stock to flow ratio of 1:1. All of the monetary premium it accrued would be siphoned off by the oil companies…
Gold has a stock to flow of 70. At current annual production, it would take 70 years to double the total supply. A large increase in price will not result in much change to the supply, even if mining efforts doubled. The monetary premium accrued by the gold would only be reduced by 2% by the increase in mining.
Gold is one of the least useful commodities there is, yet it has value. That value does not derive from its utility as jewelry, electronics. It has value because it is used as money. And it became money because it was difficult to increase the total supply, compared to the amount already in supply.
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Yes, fiat is pure monetary premium. The difference is the banker class can create more and steal value from everyone, with zero effort.
Bitcoin: no one can create more and steal from you.
Bitcoin: no one can create more and steal from you.
It sounds like you are just using another version of the "currency" argument. If I am incorrect, please explain or inform me.
Why are people selling fiat for other "real" things, then? The good money always swallows up the bad, as @chance vought has stated.
I’m not saying gold will be worthless. All of its monetary premium will eventually go away. It might be $100-500/oz. Still expensive relative to other industrial metals.
If Bitcoin de-monetizes, it will be worthless, because that is its only use case, and only security. If it isn’t valuable, its security incentives also fail.
If Bitcoin de-monetizes, it will be worthless, because that is its only use case, and only security. If it isn’t valuable, its security incentives also fail.
You'll notice in the Peter Schiff v Raoul Pal debate, RP points out that gold is at least 92% mimetic in its valuation, meaning if we are honest, gold also is used as a representation of other things, especially with its properties, which is why it has been good money.
Of course, just as we saw from Scorpion in this thread, there is always something weird about the anti-BTC crowd: they don't hold BTC to the same standards that they do everything else in the current, debased world. This is one of the strangest things and is why their arguments are so unconvincing. Every criticism that they put on BTC should also be applied to gold, but they don't do it, which should be clear to anyone paying attention who is honest. And the only difference, since BTC actually has more useful properties (key point here, don't miss it) is status quo. When you see this, you see what the other side is doing, and you can't unsee it, which forces you to be honest and accept what chance and I are saying.
You missed the point I was trying to make. All those types of money such as Rai stones, glass beads etc were used in primitive soceity's. No great civilization ever used a non-useable and non consumable form of money except for fiat which was forced by governments at gun point. And besides the U.S. dollar became the world's reserve currency in part because of the "petro dollar standard". Its arguable if oil was not priced in U.S. dollars whether the world would have adopted it as reserve currency.
You claim that people used gold as jewellery because it was money but I feel it was the opposite way around and you are putting the cart before the horse. Can you provide evidence for your belief that people used gold first as money and then later as jewellery?
Gold cannot stay that low just look at the cost of production. If gold dropped to $500 per ounce 90% of gold mines would shut down.
I would argue that gold, especially before electronics, was not very useful.
The dollar as a reserve currency started after Bretton Woods in 1944. After WW1, and up to WW2, the US had 70% of the world’s gold supply in its vaults. He who has the gold makes the rules, and the US dollar was convertible (by nation states) into gold at $35/oz.
The petro dollar standard was a scheme to prevent the complete collapse of the dollar, following the closing of the gold window in 1971.
No pure fiat has ever been accepted as money. They all started off “backed” by something. Even at gunpoint, it would be non functional as money. The reason it is accepted today is the value of the network, and the other properties like ease of transport.
Jewelry came first, but gold wasn’t stored and sought after just for the sake of jewelry. Its production far outstripped the demand for its other use cases (like jewelry).
Exactly, because there is not enough demand for electronics and jewelry alone to support the current production rate. Mines would assuredly shut down, but because the supply is so huge, the price would only slowly increase. Unlike when OPEC cuts production to oil and there is an immediate effect on price.
92% mimetic value is dishonest and has no basis in fact. Look at the cost of production of gold virtually every gold miner would go out of business if the gold price dropped 92%. Also according to this link below only around 45% of gold production is for investment purposes.
Gold demand worldwide by industry share 2023 | Statista
The jewelry industry accounted for a 48.7 percent share of global gold demand in 2023, which amounted to about 2,168 metric tons.
www.statista.com
And in the link below it shows 45% of above ground stock of gold is stored in the form of jewellery.
How Much Gold Has Been Mined? | World Gold Council
Lately, over 187,000 tonnes of gold has been mined, most of which still exists today. Learn how much gold has become jewellery and the future of gold mining.
So how exactly do you get to 92% mimetic value?
So you just agreed with my point that historically in a complex society money has always been something useful (or at least backed by something useful). So that was my point that you finally acknowledged that Bitcoin would be novel and a break with tradition in being the first time in a complex society that money which was voluntarily used was not useful or backed by something useful. I just want you to acknowledge that is uncharted territory and why many gold bugs see Bitcoin as inherently riskier than gold.
Maybe it’s only 50%, so it drops to $1k/oz. Or maybe it stays at 2k. I’m sure gold will go up in the next few years. We will probably see $5k or even $10k gold.92% mimetic value is dishonest and has no basis in fact. Look at the cost of production of gold virtually every gold miner would go out of business if the gold price dropped 92%. Also according to this link below only around 45% of gold production is for investment purposes.
Gold demand worldwide by industry share 2023 | Statista
The jewelry industry accounted for a 48.7 percent share of global gold demand in 2023, which amounted to about 2,168 metric tons.
And in the link below it shows 45% of above ground stock of gold is stored in the form of jewellery.
How Much Gold Has Been Mined? | World Gold Council
Lately, over 187,000 tonnes of gold has been mined, most of which still exists today. Learn how much gold has become jewellery and the future of gold mining.www.gold.org
So how exactly do you get to 92% mimetic value?
30 years from now, it won’t be worthless.
Gold was never backed by anything useful.
And how can you say Bitcoin has no use? What about carrying wealth across borders, or securing it against theft? Things that are impossible for anything else.