I get that anything is worth whatever someone is willing to pay for it. That’s besides the point. My point is, beyond speculation, what do crypto coins represent?

I also understand that the value of the US dollar is being questioned almost as much without the backing of gold.

But what I really want to know is what is at the foundation level of Bitcoin that people are buying into?

I have a basic understanding of the blockchain, etc. I sold 1BTC in 2017 for $1200 when I thought that was as high as it would go. At this point, at over $100kUSD and rising steadily, what is the $ limit and what is that limit based upon? I thought it was based on the value of mining to check transactions but this seems… not worth $100k to me.

I’ve been thinking, the only tangible value I personally see in Bitcoin, because it’s not really being used as legitimate currency, is for criminals. By now, there must be trillions of dollars in BTC acquired by criminals holding corporations hostage. When you’ve got people like Trump involved (either explicitly or by way of manipulation) with an executive order to establish a crypto czar, this suggests to me that he’s creating pathways for bad actors to more effectively gain more wealth. These are the people who are most excited in Bitcoin, beyond speculation.

I mean, there’s little to nothing on the up and up with crypto, right? It’s a scam. Right?

Please, factual answers only. I’m looking for someone to dispel my speculation with genuine economics of the matter.

  • CanadaPlus@lemmy.sdf.org
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    22 minutes ago

    Bitcoin specifically? No. It’s a janky prototype that should have been superseded a long time ago.

    Crypto in general? Probably something. It’s good for buying and selling illegal things.

  • weeeeum@lemmy.world
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    3 hours ago

    Bitcoin has massive value as a tool to transfer money, anonymously, and through borders effortlessly. Its extremely valuable for money laundering, scamming, stealing, and dodging tariffs or raising money (see how much crypto is stolen by north Korea)

  • Melatonin@lemmy.dbzer0.com
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    8 hours ago

    Paper money isn’t worth anything innately. Gold isn’t either. Not diamonds. Nothing has innate worth except food, air, drinking water, and possibly shelter.

    • Sludgeyy@lemmy.world
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      4 hours ago

      Gold and diamonds have intrinsic value

      Gold is needed for computer parts, and diamonds are used for cutting

      They are more than just shiny

      Their value will “never” hit 0 (Bitcoin would be worthless without gold for computers)

      Yes, we could find substitutes in the future, but for the substances to not be useful somehow is so low and would have to be an apocalyptic scenario. And in an apocalypse, gold could even be worth more.

    • Jeroen@lemmings.world
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      7 hours ago

      (Paper) money is practically actually valuable because you need it to pay taxes. Gold, diamonds etc you could do without. Of course there is more nuance but taxes force people to value currency and therefore also accept it from others (because you need some of it or you go to jail), which gives currency the circular value.

      • Melatonin@lemmy.dbzer0.com
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        It’s not valuable, it’s a convention. You may as well use conch shells or Bitcoin. Don’t matter what it is, it doesn’t have value until we all agree it has value

  • TabbsTheBat@pawb.social
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    1 day ago

    So you know how fiat currency is backed by nothing more than the fact the government says it’s valuable and we all agree to that? Crypto is sort of like that except without the government bit

    • agamemnonymous@sh.itjust.works
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      Yup, all boils down to faith in the currency. For something like the dollar, it’s backed by faith in the US government. For something like Bitcoin, it’s backed by faith in the resilience of the blockchain and the value buyers place on it. Emperor Norton minted his own currency which was accepted all around San Francisco based purely on the fact that people accepted it.

    • EfreetSK@lemmy.world
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      But I can buy anything with fiat curency and with bitcoin I can basically buy nothing. And I never will be able probably, bitcoin is too slow to be used as an actual curency to buy common things like groceries

  • ProfessorScience@lemmy.world
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    This is not the same for all crypto currency, but a bitcoin represents a “proof of work”. When people “mine” bitcoins, they are consuming computational resources, and when they find a bitcoin, it is a certification of the work that was done to find it that becomes the value of the coin. And then, as others as mentioned, people just agree that that work has a certain amount of monetary value. But the proof of work is what limits the supply and allows that value to exist. 3Blue1Brown has a really good video that goes into the technical details if you’re interested.

    • oxjox@lemmy.mlOP
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      23 hours ago

      Thank you for being one of the few to take me seriously and offer a thoughtful response.

      I can understand now the value of a token that represent some amount of effort that is limited in its supply. As “promised”, no other bitcoins will ever be made. So this alone makes it worth something. The fact that it represents some amount of effort achieved does seem to give it some validity. Although, IMO, certainly not $100k worth.

      I’ll need to think this over some more and maybe update this post with some more thoughts on the future of the coin.

      • tias@discuss.tchncs.de
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        The key feature is that there’s a mechanism that limits supply. Other than that, value only exists because enough people agree that it has value. Fiat currency is exactly the same in this regard.

        I think your questions indicate that you don’t have sufficient understanding of how “ordinary” money works. It’s just a promise of being able to exchange it for goods & services in the future, and its value hinges on people trusting that promise.

        • Jeroen@lemmings.world
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          7 hours ago

          (posted this comment somewhere else too)

          (Paper) money is practically actually valuable because you need it to pay taxes. Gold, diamonds etc you could do without. Of course there is more nuance but taxes force people to value currency and therefore also accept it from others (because you need some of it or you go to jail), which gives currency the circular value.

  • locuester@lemmy.zip
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    At its core, it represents an irreversible proof of digital existance. Blockchain is the only technology that can do this, and it makes it more valuable than you’d think.

    Bitcoin itself has first mover advantage, and that keeps it on top. It’s hard to point to any particular feature of bitcoin that warrants this first place position, aside from pure decentralization of holdings.

    The irreversibility of blockchain transactions is very underrated to most of us, but think about it… no bank or government, even with military involvement, can reverse a transaction or seize assets. For most of us in nations with sophisticated financial infrastructure and govt, this doesn’t sound like a big deal, but for the majority of the world, this is a huge deal.

    It also represents freedom from fiat. Since the beginning of currency govts have used it as a means to extract wealth from the populace. Printing, confiscating, and controlling as it pleases them. We’ve historically used gold to hedge against this, and there’s even instances in history where govts have devalued and confiscated gold as a means of supporting itself. Bitcoin brings all the freedom of gold, with all the benefits of the digital world.

    • oxjox@lemmy.mlOP
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      23 hours ago

      Awesome. I appreciate this perspective.

      Can you dig a bit deeper into the benefits for normal people that an irreversible transaction offers? To me, this seems like a detriment. Like, if I sell something on eBay and it turns out to be broken or fraudulent, PayPal can reverse the charges for me. Actually, I have a real world example of buying sneakers online that never arrived and had my credit card reverse the charges for me.

      • dizzy@lemmy.ml
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        So PayPal or your bank are third parties that you have to trust will act honourably.

        You can still do that with cryptocurrency and use third parties or dapps with escrow style protection features but you can also do direct transfers, without any third party involvement and no protection, like giving cash to someone requires no third party approval and there are no protections.

      • locuester@lemmy.zip
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        17 hours ago

        It’s not a benefit in the example that you provide. It’s a benefit to the seller for sure. For that type of transaction it benefits you with lower prices due to retailers not having fraudulent sales result in chargebacks. This is the reason you’ll see it adopted by merchants (not Bitcoin, but stablecoins on Solana or Eth L2s).

        The benefits on the consumer side are around freedom of money - no seizures, no bank runs, no fraudulent cc charges (but added key management risk), no inflation (eh, but added volatility rn), instantaneous worldwide transfers (that’s where you see the remittance market buying in). Also new decentralized financial markets which bring better yield rates than banks.

        It’s a little more gray on the consumer side and I would expect services built on top to add insurance, escrow, and custody (exchanges and banks) type features.

        The other place it’s making waves is with larger amounts of money. Hedge funds, venture capital, and higher net worth individuals. It makes moving capital around much easier.

        So in that realm we see growth with it making its way into traditional markets - like stocks and commodities. Instantaneous settlement in this world is huge. Stock transactions can take anywhere from a day to 3 days in the tradfi system. On-chain we make atomic, irreversible, censorship resistant transactions instantly.

        You can already see companies launching stock backed tokens on chains now. Just a couple weeks ago StockX went live on Solana. Anyone can buy US stocks, anonymously, with no onboarding requirements. This disrupts global capital markets.

        So in summary, the benefits down at the consumer level focus more around access to new, secure products for earning yield and availability of alternative inflation-free assets with instant availability.

        Also, privacy. This world really re-enables us as consumers to have some financial privacy. That’s another whole rabbit hole tho and my thumbs are tired.

      • ThanksForAllTheFish@sh.itjust.works
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        I guess it’s more useful as a store of wealth than a currency. Like gold it can be transferred irreversibly between owners, except now the transfer and storage costs are significantly reduced and it’s available to the general public as an option. The key benefit is the use of the internet as a transfer medium, you no longer have to rely on a third party to facilitate the exchange, which for most large transactions means paying someone to transport it and store it (lawyers, guards, banks).

        It does allow for easy exchange for all users, including criminals, but generally using it for crime is a terrible idea, as every member of the network can see all transactions. Bitcoin is more of a notice board about what addresses have what amounts, and if you can prove to the people that post on the notice board that you control an address, you’re allowed to spend the contents and update everyone of where you sent it.

        People came up with an idea for how to do chargebacks, it’s called an escrow service, a third party that holds the money until all parties have had a chance to raise a dispute and confirm they are happy. This is the same as how PayPal works, trust based on reputation of the escrow provider, and the escrow provider is payed a fee. It’s just that now with bitcoin, you also have the option to complete the transaction online without an escrow provider, the same as you would in person with cash.

    • nondescripthandle@lemmy.dbzer0.com
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      One could argue envriomental damage or power consumption, which is of almost no relevance to a currency, but thats the imprint they leave on the world because of their existence.

      • BertramDitore@lemmy.zip
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        Yeah, this is what I came here to mention. Environmental damage and power consumption are what bitcoins cost, but those costs don’t give bitcoins any inherent value.

        It’s actually a pretty appalling example of human ingenuity. We’ve managed to invent something that has a disproportionately terrible impact on every person on earth through its environmental effects, while simultaneously producing no practical value to anyone other than those wealthy enough to be in control of it.

  • floo@retrolemmy.com
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    I was shooting heroin and reading “The Fountainhead” in the front seat of my privately owned police cruiser when a call came in. I put a quarter in the radio to activate it. It was the chief.

    “Bad news, detective. We got a situation.”

    “What? Is the mayor trying to ban trans fats again?”

    “Worse. Somebody just stole four hundred and forty-seven million dollars’ worth of bitcoins.”

    The heroin needle practically fell out of my arm. “What kind of monster would do something like that? Bitcoins are the ultimate currency: virtual, anonymous, stateless. They represent true economic freedom, not subject to arbitrary manipulation by any government. Do we have any leads?”

    “Not yet. But mark my words: we’re going to figure out who did this and we’re going to take them down … provided someone pays us a fair market rate to do so.”

    “Easy, chief,” I said. “Any rate the market offers is, by definition, fair.” He laughed. “That’s why you’re the best I got, Lisowski. Now you get out there and find those bitcoins.”

    “Don’t worry,” I said. “I’m on it.”

    I put a quarter in the siren. Ten minutes later, I was on the scene. It was a normal office building, strangled on all sides by public sidewalks. I hopped over them and went inside.

    “Home Depot™ Presents the Police!®” I said, flashing my badge and my gun and a small picture of Ron Paul. “Nobody move unless you want to!” They didn’t.

    “Now, which one of you punks is going to pay me to investigate this crime?” No one spoke up.

    “Come on,” I said. “Don’t you all understand that the protection of private property is the foundation of all personal liberty?”

    It didn’t seem like they did.

    “Seriously, guys. Without a strong economic motivator, I’m just going to stand here and not solve this case. Cash is fine, but I prefer being paid in gold bullion or autographed Penn Jillette posters.”

    Nothing. These people were stonewalling me. It almost seemed like they didn’t care that a fortune in computer money invented to buy drugs was missing.

    I figured I could wait them out. I lit several cigarettes indoors. A pregnant lady coughed, and I told her that secondhand smoke is a myth. Just then, a man in glasses made a break for it.

    “Subway™ Eat Fresh and Freeze, Scumbag!®” I yelled.

    Too late. He was already out the front door. I went after him.

    “Stop right there!” I yelled as I ran. He was faster than me because I always try to avoid stepping on public sidewalks. Our country needs a private-sidewalk voucher system, but, thanks to the incestuous interplay between our corrupt federal government and the public-sidewalk lobby, it will never happen.

    I was losing him. “Listen, I’ll pay you to stop!” I yelled. “What would you consider an appropriate price point for stopping? I’ll offer you a thirteenth of an ounce of gold and a gently worn ‘Bob Barr ‘08’ extra-large long-sleeved men’s T-shirt!”

    He turned. In his hand was a revolver that the Constitution said he had every right to own. He fired at me and missed. I pulled my own gun, put a quarter in it, and fired back. The bullet lodged in a U.S.P.S. mailbox less than a foot from his head. I shot the mailbox again, on purpose.

    “All right, all right!” the man yelled, throwing down his weapon. “I give up, cop! I confess: I took the bitcoins.”

    “Why’d you do it?” I asked, as I slapped a pair of Oikos™ Greek Yogurt Presents Handcuffs® on the guy.

    “Because I was afraid.”

    “Afraid?”

    “Afraid of an economic future free from the pernicious meddling of central bankers,” he said. “I’m a central banker.”

    I wanted to coldcock the guy. Years ago, a central banker killed my partner. Instead, I shook my head.

    “Let this be a message to all your central-banker friends out on the street,” I said. “No matter how many bitcoins you steal, you’ll never take away the dream of an open society based on the principles of personal and economic freedom.”

    He nodded, because he knew I was right. Then he swiped his credit card to pay me for arresting him.

  • When it was first released, I was interested in the decentralized nature of it as a currency. I liked - well, I still like - the idea of a currency that isn’t controlled by a government. At the time (2009-ish?), I also thought it was anonymous, which also appealed to me; cash is mostly anonymous, but it can’t be used online, and even then the fact that society was increasingly moving toward cashless - and very traceable, and usary-heavy - credit cards was clear. Stripping privacy is critical to control.

    Bitcoin isn’t anonymous, but other cryptocurrencies are, and bitcoin laid the groundwork. To your question, I, and many other people, paid some money to get some bitcoin - I think I spent $120? Mainly so I had enough to explore the space and play with it, because even then mining seemed painfully slow. Once money was spent on it, by whomever and for whatever reason, it acquired value: the value that, if you had some, you could sell it to someone else, or trade it for goods. In that way, it has the same value as an IOU on which I’ve scribbled “Good for $10 from Ruairidh Featherstonehaugh” and signed my name. Flawed metaphor, but you get there idea - the paper itself has no intrinsic value.

    Despite that mining is so horrible for the environment, the concept that motivated Bitcoin still IMHO has value. An entirely digital, cashless system, not controlled by any one organization but rather by the community of participants. If Bitcoin didn’t have the environmental cost - if it has been proof-of-stake rather than proof-of-work, or if the computational work was actually something useful to society like gridcoin.us, it wouldn’t be so controversial. Sure, people are still going to be bitter about not buying into it early, but as long as people are willing to trade goods and services for it, it’ll have real value based on market rates.

  • Windex007@lemmy.world
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    What is a first edition holographic charizard worth? What is the utility of that card?

    Things are worth what people are willing to pay for them.

    You can’t eat a Bitcoin for sustainance. Or hammer a nail with it. You can’t do either of those things with a pokemon card either.

    I feel like you get this, based on your post… But you still are hung up by it.

    Bitcoin’s attractive utility for many is that you can transfer them pretty much unimpeded by any external entity. Like a government for example.

    Like, hypothetically, what if you wanted to send a million dollars to your family back in, I dunno, Hong Kong. Do you think you can put that in a suitcase and hop on a plane? Do you think your bank will just send that wire? No. Government needs to know about it.

    You can send a million dollars worth of Bitcoin, though. No problem.

    What about if the government decides to seize your assets, for whatever reason? Maybe you were a little too loud about your support of Palestine and a man child president decided to make an example of you? They can raid your home. They can seize your bank accounts. Can they get your Bitcoin? Nope (if you’re actually holding it yourself)

    What sets Bitcoin apart from other currencies is that it’s very government resistant. You CAN hold it yourself. Not digitally in a bank. Not as bills under your mattress. It cant be seized.

    How much SHOULD Bitcoin be worth, given the utility it provides? No idea. But it’s something.

  • Anna@lemmy.ml
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    In this world anything can have value as long as there are other stupid ppl who’d believe you. Any form of money is just a piece of paper. Gold, silver and all those are just rocks. Even food once was cherished as the ultimate wealth but now we waste food by Metric F*ck tonnes.

    No one on this earth or beyond can predict what will be the value of anything. If someone says this is going to make you a millions they are either trying to sell you their course/books/etc. Or they think you are the next idiot to whom they can sell garbage.

    • 小莱卡@lemmygrad.ml
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      Yea, there is an objective value, as in the average labour needed to produce the thing but there is also the value that people perceive. The more divorced from production people are, the more the abyss between objective and perceived value grows, this is how you get cardboard pokemon cards being valued at four figures or more.

      At the end of the day, marketing is more about creating a mythology around a thing than informing people about the product.

  • reallykindasorta@slrpnk.net
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    Besides gambling hype I think regular people are into it for a couple reasons:

    -don’t have to trust the whims of your state government (who could devalue their currency at any time)

    -deflationary by design so your earnings maintain value (no one could discover a btc meteor to mine)

    -Requires broad miner consensus to change the rules

  • sylver_dragon@lemmy.world
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    Bitcoin is a ponzi scheme with a really long time horizon. In a way, any fiat currency kinda is as well. The difference is that a government backed fiat currency like the US Dollar is backed by the US Government saying “you will accept the USD, or else”. That backing keeps the game running. Bitcoin has nothing like that. The only reason it keeps going is because of speculation, money laundering and the purchase of black market goods.

    So, as long as you can go buy drugs or move money across borders with Bitcoin, it will have value. As long as it has value, some folks will speculate on it. That can keep prices up, right up until it doesn’t. So, as is always the case for speculative assets, caveat emptor.