Bitcoin discussion and news
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q_w_e_r_t_y
You see an investment scam and I see divinity
Seems to be primarily driven by the greyscale bitcoin trust. They have bought up all bitcoins mined since the halving and then some. They then sell them on in a carefully legally compliant tax-avoidance wrapper at a massive premium to investors in their trust. Investments start at £25k.
Keep hold of your satoshis.
Brainaddict
slight system overdrive
Do people have any thoughts on the prospects for Ethereum, its upcoming shift to proof of stake (which will be faster and much more energy efficient than bitcoin) and whether it stands a chance of becoming the more important blockchain?
q_w_e_r_t_y
You see an investment scam and I see divinity
Ethereum is super interesting. Adding smart contracts to blockchain lets you do so much more. It has a few platform rivals tho - polkadot, cosmos, tron etc and the gas fees at the moment are excruciating, but its certainly going to be an important blockchain. Bitcoin is still unique tho in that it is the longest chain, the best supported, and the most secure, and I dont see that changing any time soon.
moochedit
I'm not feeding seagulls
q_w_e_r_t_y
You see an investment scam and I see divinity
Very possibly.Sounds like a future mis-selling scandal in the making to me
But Greyscale can argue that the investors arent buying bitcoin, they are knowingly buying a regulatory compliment bitcoin derivative.
SheilaNaGig
Break requested
I’m suddenly getting loads of bitcoin emails landing in my inbox daily. I’ve never even googled the word, so there’s no apparent reason for them to target me directly. It’s obvious even to me that something is going on out there...
littlebabyjesus
one of Maxwell's demons
I feared this might happen with covid. It's totally irrational to turn to bitcoin in a crisis - makes more sense to buy premium bonds - but bitcoin isn't a rational phenomenon.
Hearse Pileup
Horse Pickup, isle 5
There are so many more interesting decentralised projects out there that are actually worth our time.
But bitcoin is the one that makes money
Well, is money, in a sense.
I’m surprised it’s happening now though. I thought it might happen much earlier in the crisis but now would be the time for people to get back into more traditional investments.
littlebabyjesus
one of Maxwell's demons
It is many things. Money isn't one of them. It's a commodity, one with a tiny use value whose exchange value has ballooned on the back of a speculation bubble. Most of the 'money' represented by bitcoin in fact takes the form of fictitious capital. Nothing like the amount of capital supposedly represented by its current value has ever changed hands.
And its waste of energy is criminally insane.
littlebabyjesus
one of Maxwell's demons
I am a bit as well. Given that most of it is hoarded, I suspect it doesn't take much of a percentage change in demand for its price to soar.
Hearse Pileup
Horse Pickup, isle 5
Hmm, interesting argument. In an age of digital currency, I guess the exchange value of the related cryptographic work to verify your transaction is the thing that changes it from currency to commodity? At the end of the day most currency amounts to a value stored in a computer (yes we still have physical currency but it is definitely diminishing in use), it's an interesting distinction to make.
It would mean that when you buy bitcoin, you are paying for the processing power of however many cycles a decentralised network of machines uses to transfer that commodity to you, in the hopes that someone else will value a similar transaction at the agreed rate.
I'm no economist - just someone who's into tech - so please forgive me if I'm using the wrong lingo!
It is currency, but it’s not money. Money has various criteria associated with it and Bitcoin does not fulfill them. My apologies, however, but I don’t feel like rehearsing all this yet again on this thread.
littlebabyjesus
one of Maxwell's demons
Marxist analysis is the best way to look at bitcoin, imo. That's basically what I provided above.
Also, it has no fundamentals. Nobody is paid their wages in bitcoin - it doesn't represent the value of real work. Its value is purely based on the existence of anticipation that the value will go up, on confidence, and I'll be surprised if it doesn't plummet very quickly again from this new height.
Its value changes massively by the hour - no good as a currency at all. And its use value is really tiny. There have been various innovations to increase the number of transactions on each block, but it's limited by its design. Its volume of transactions is a tiny fraction of one percent of the volume of, say, VISA transactions. Its use value is still mostly for people buying and selling weapons and illlegal drugs. The speculation bubble that created the enormous exchange value has grown out of that, and can very easily collapse back into it. That's not what money does. It's what commodity speculation does. Think more Amsterdam tulip bulbs than dollars or pounds.
There is a torrent of bullshit written about bitcoin, including that its value somehow represents the energy put into the mining. The amount of energy put into mining is certainly driven by the speculation, but it has zero value. It is put towards solving a useless algorithm. It pays to look at the phenomenology of things in this kind of situation - forget the magical thinking, what is actually happening, what actually exists?
Hearse Pileup
Horse Pickup, isle 5
Apologies for diving in without reading earlier explanations - I can understand why repeatedly explaining the same thing is frustrating. I'll try to do a bit more of my own research. You're right about the value in mining; especially as it costs roughly the same no matter the transaction value. I've done some very light Maxist reading, but in general my political theory is not very developed.
littlebabyjesus
one of Maxwell's demons
Hopefully the terms I've used are understandable. They're quite simple concepts really, but imo powerful in this context.
It's a bit depressing tbh that bitcoin is on the rise again. It needs to crash and burn. Would have been great not to have had to have this conversation again.
Hearse Pileup
Horse Pickup, isle 5
Yeah it mostly makes sense to me - the tulip vs pund coin was very powerfully illustrative
I think I'll want to do my own research into how you define 'Money' vs a commodity, but that's a journey I need to partake in for myself. I think you've definitely helped point me in the right direction though.
I fully agree about the waste in energy though. The biggest joke about it is that it's kind of a posterchild for decentralisation... as in a decentralised storage system... for a centralised, single-source-of-truth ledger.
So decetralisation used as a selling point for infinitely scalable centralisation
One key thing about money is that it is is used within ledgers. Who is determining value based on Bitcoin rather than vice versa? Who is setting things like tax liabilities using bitcoin? Sterling doesn’t just get its value from people conceptualising it as an abstract concept known as “money”. It gets its value from the power of the nation-state, who demand that those existing within the state account for themselves in Sterling. That is what makes it money. It is a unit of account.
Hearse Pileup
Horse Pickup, isle 5
q_w_e_r_t_y
You see an investment scam and I see divinity
A marxist analysis of Bitcoin doesnt work because marxism relies on the Labour Related Theory of Value, but as Podilinsky pointed out, Human Labour is only one form of work (ie directed energy), and we dismiss the directed energy from other sources (eg the horse that ploughs the fields).
Bitcoin is crystalised stored energy. Money is the closest proximation we have had to that so far. Bitcoin is far superior to money.
And, yes, people do receive their wages in cryptocurrency.
Bitcoin is crystalised stored energy. Money is the closest proximation we have had to that so far. Bitcoin is far superior to money.
And, yes, people do receive their wages in cryptocurrency.
JimW
支那暗杀团
Podlinsky sounds a bit dim. Could he not have tried reading Marx before attempting to refute him with the bleeding obvious?
littlebabyjesus
one of Maxwell's demons
I really don't know whether to
or 
when I read stuff like that.My analysis above doesn't mention the labour theory of value, and it doesn't depend on it. Your analysis relies on the magic theory of value. Can't argue with magical thinking.
butchersapron
Bring back hanging
He was aware of Marx for sure - check HM 16 #1 for a thorough destruction of what he tried to do with it though.
edit: oh they don't seem to link to the actual articles anymore. Hang on and i'll upload one.
Paul Burkett,John Bellamy Foster - The Podolinsky Myth: An Obituary Introduction to 'Human Labour and Unity of Force', by Sergei Podolinsky
NoXion
Craicy the Squirrel
Horses don't plough fields without human direction. Energy has to be directed by someone somewhere in order to do anything that one might consider useful. There is still the question of who is directing the work, and who is at the coalface doing it. You think bitcoin mining servers run themselves?
No, it is not "stored energy", let alone "crystalised". You can't feed bitcoin into an electric heater and get it to work. You have to convince someone else that the bunch of electronic digits you possess have sufficient value to be worth exchanging for either electricity, or more likely actual money to buy electricity. Most power suppliers don't accept bitcoin.
No. Money is value, not energy.
Why? Hardly anyone uses them. US dollars, on the other hand...
People also get wages made up with tips. Doesn't it mean it's a good idea.
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