
Bitcoin’s Wild Ride Shows the Truth: It Is Probably Worth Zero - rayuela
https://www.wsj.com/articles/bitcoins-wild-ride-shows-the-truth-it-is-probably-worth-zero-1505760623
======
panarky
At least the author has a new argument I haven't seen before.

1) Gresham's law: bad money drives out good

2) Bitcoin is good money (deflationary, holds its value)

3) National currencies are bad money (inflationary)

4) People prefer to "hoard" good bitcoin and spend bad national currencies

(So far, so good)

5) Therefore, since people prefer to own bitcoin, it has zero value

(Not every new argument has to make sense, I guess.)

~~~
alexasmyths
What you are referring to as 'good money' , most people would call 'stupid
money'.

It's a stupid idea to run a country with a fixed amount of currency - as the
economy expands, more currency is needed - either that - or _all prices_ of
_everything_ need to adjust because the 'stupid currency' is fixed.

A 'well managed' currency is better than a fixed supply.

Of course - the 'existential risk' is that some political cowboy will 'print
money' for political reasons - this is the great problem that fiat always
faces.

But this can be avoided.

Most major currencies are very well managed.

Also - remember that they are backed by actual assets - so money is not coming
out of nowhere.

Almost all Euros are backed by some kind of quality asset. It's very rational
to allow entities to 'trade' some kind of asset for currency at the central
bank. This is actually more 'free market' than any kind of fixed currency.

National currencies - irrespective of the quality of their governance, fixed
or not - are _extremely useful_ to everyone. They 'spend' that currency
because it's what's used to buy stuff.

Household expenditures: mortgage/rent, electricity, groceries, insurance, gas,
car payments, cable/internet. Can you use BTC for any of that. Pragmatically -
No. BTC is 'pragmatically worthless' to anyone - it has no reason to exist.

BTC is _very useful_ to money launderers, tax evaders, and other people doing
illicit things, it's a _great_ currency for the black market. But beyond that,
it serves no purpose. It's not a currency and it's a terrible store of value
as compared to any of real-estate, gold, most commodities, a 'basked of bonds
of equities' or a 'basket of currencies'.

It's a great intellectual exercise, and I think the 'paper value' of BTC will
remain quite high for some time, but unless it sinks in as an actual currency
of some economy (say, African nations where the currency is garbage), in the
long-long-long run there's no reason for it to maintain it's value.

~~~
dreit1
When will the bitcoin haters finally realize that bitcoin is terrible for
illicit transactions. The transactions is recorded forever...on a public
ledger...and any money in or out of your address is traceable

~~~
markatkinson
I know... every time I hear/read that it raises a red flag that maybe this
person hasn't done much reading on the subject to begin with and just heard it
through the luddite grapevine.

~~~
Spivak
Because it's a currency that works like cash over the internet with no
reversibility, it can be easily laundered via mixers, and has no ties to your
real life identity unless you want it to.

It's not perfect but it's by far the best currency for illicit _online_
transactions.

~~~
ldiracdelta
When you use a coin tumbler, the image invoked is that of laundering like
clothes tumbling in a washer machine. How can willingly jumping into an
optional laundering service not raise a red flag? Is it possible that another
cryptocurrency like Monero will have privacy as a default that makes it so you
don't look like Al Capone when you [maybe] want to just preserve some privacy?

------
aussieguy123
He said gold was better, because gold doesn't cost electricity to produce
whereas bitcoin does.

Thats not true, you need electricity (and other resources) to: \- mine gold \-
build storage facilities to store gold \- transport the gold

~~~
blunte
Not to mention the very direct human and environmental costs of mining,
particularly for the mines in Africa and China.

------
codewritinfool
Nevermind the subject, this article is _really_ poorly written.

~~~
jameskegel
Most of these types of uninformed, regurgitated, bait-articles typically are,
because _that 's_ what makes them so effective. They don't want you there
admiring the technical or journalistic merits of the article, they want you to
link it because it is so outrageous, "look how absurd this is, just click it
and LOOK!"

~~~
emodendroket
I don't really see what's absurd or outrageous about the claims in this piece.

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camus2
non obfuscated article archive because nobody can read the WSJ at first place
:

[http://archive.is/uUnGp](http://archive.is/uUnGp)

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blunte
If you look at how WSJ treats any subject, particularly bitcoin, you'll see
that they are just a media company catering to their paying
advertisers/audience. The substance of what they write is often questionable,
if not out-right wrong.

With respect to bitcoin, WSJ was slightly curious, then quite suspicious, then
outright negative, then cautiously optimistic, then very bullish, then "DO YOU
HAVE A BLOCKCHAIN?!", and now reigning in some of their foolish enthusiasm
(about how blockchains will revolutionize _everything_).

Like any successful politician, telling different stories at different times
will satisfy more people.

~~~
consz
Isn't this just an artifact of different writers having differing opinions on
Bitcoin? I see no reason why a magazine with N > 1 writers should have a
consistent opinion across the board on bitcoins (or anything).

~~~
jankotek
I think OP complains about quality, not consistency.

> _So is a single bitcoin worth $500,000, $5,000, $500 or $0? I’m inclined to
> say $0_

> _The digital currency’s value depends on it becoming digital gold—or on
> criminals_

This is opinion (aka bu*hit).

------
TopDeadCenter
Overall, probably one of the weakest arguments I've heard yet about Bitcoin.
Despite the title the author completely failed to show any evidence, let alone
the "truth", of how or why Bitcoin was worth ZERO. This is obvious click bait,
because the author knows that Bitcoin is trending right now and people
considering buying it will open this when doing research.

So the author wins in the ad revenue category, but the point he's trying to
make basically sums up to : "Bitcoin is just a craze with no inherent value.
Even though it's good money like gold, and people hang on to good money
because it has inherent value. People spend bad money because they know it can
lose value. But bad money is good because it's well regulated. And even though
bitcoin is good money then it's worse then bad money because it's speculative.
Gold is also completely speculative but it's been speculative for generations
so don't worry about it. Also, Bitcoin takes a lot of electricity to mine.
It's no where NEAR the amount of energy that mining and minting a tiny bar of
gold takes, but I'm not going to mention that. I didn't really think about
that part because I trade gold using Forex, which means that I essentially
hold a digital representation of gold and don't actually physically hold any
gold except my wife's jewelry. But if the government collapsed, then gold
would still have value because it's physical, and digital assets like Bitcoin
would be worthless.

VERY convincing.

------
dba7dba
Time to buy MORE BTC and LTC and other cryptocurrencies.

Remember, when WSJ and analyst says to do something, do the opposite.

------
afishisafish
What I'm missing from the article is that Bitcoin often is seen as the
"reserve currency" of the cryptocurrency world. Bitcoin might not be superior
technology wise, but it is the de facto standard for trading other
cryptocurrencies.

~~~
emodendroket
Are any of those less susceptible to any of the flaws mentioned here than
Bitcoin is?

~~~
afishisafish
Yes, many altcoins serve different purposes other than just being a currency
pur sang.

Ethereum and NEO for example enable developers to build smart contracts
(Dapps) with real-life use cases.

Musiccoin tries to solve unfair royalty payouts in the music industry.

There are so many new initiatived, and I'm convinced we are only at the very
start of this blockchain revolution.

------
SolarNet
The most interesting part of this article also counter his point: the possible
theoretical values of bitcoin.

------
xiphias
The fact that the author knows about Bitcoin means that he will have it before
other people. He understands that its value is either infinity or 0 counted in
dollars... he just needs to change the direction

------
Pietbull
According to his bio, James Macintosh (author) has a degree in Philosophy and
masters in Psychology. Probably not the best basis for in-depth Bitcoin
analysis/advice. #justsaying

~~~
likeclockwork
Really? Psychology seems, to me, to be one of the best backgrounds for
understanding Bitcoin.

~~~
Pietbull
Sure, for understanding people's reactions to it - but not understanding
financial/technical/economical impact etc.

------
sunstone
Yup, just like gold.

------
Hakashiro
I wish I could report these kinds of newspapers with paywalls. Hacker News
should ban these sites. It doesn't make sense to share news nobody can read.

------
SippinLean
To me the wild ride showed a pretty solid wall of support at $3k

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manbearpigg
Well if a guy on the internet says it, it has to be true.

~~~
hndamien
I think we found the guy that regrets not buying any Bitcoin (the author - not
manbearpigg)

~~~
emodendroket
I mean I don't think anyone can deny that it turned out to be great to
speculate on so far, but is it actually a good means of exchange or store of
value? It remains extremely volatile.

~~~
blunte
In many situations it is an excellent means of exchange of value. Convert your
fiat to bitcoin, make a global bitcoin transaction (for a comparatively small
transaction fee, and within 30 minutes), then convert the bitcoin to fiat on
the other end.

That's WAY better than a bank wire, and even better than the increasingly
effective service that Transferwise provides. It's also beneficial to at least
one party because no bank can reverse the transaction.

~~~
emodendroket
It's relatively inefficient and it's hard to see why someone would choose that
over wire transfer unless they were doing something illegal. I also don't get
why "no banks can reverse the transaction" is touted as a benefit so often;
what sane buyer prefers to do online purchases where they have no recourse if
they never receive the goods?

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transverse
Why link to this paywalled article?

------
jamesmattis
Why there is so much negative PR going around about Bitcoin suddenly? I
believe that people like Jamie Dimon trying to lower the price by creating
these kind of stories to buy more.

Bitcoin will rise no matter what. Atleast for 5 more years.

~~~
kstenerud
Because they've finally entered the mainstream. The normal press cycle follows
a predictable pattern to keep people interested and reading:

1\. New and interesting thing that the hardcore people use

2\. Hopeful stories about the potential

3\. Growing excitement as adoption reaches into "real" things

4\. Doubt stories

5\. Attack stories

6\. Non-story

~~~
toppy
First they ignore you, then they laugh at you, then they fight you, then you
win

~~~
krapp

        ... the fact that some geniuses were laughed at does 
        not imply that all who are laughed at are geniuses. 
        They laughed at Columbus, they laughed at Fulton, 
        they laughed at the Wright Brothers. But they also 
        laughed at Bozo the Clown.
    
        Carl Sagan

