> The electricity company has bills to pay. If some company can find a way to make unlimited energy without expending resources, then yes, they will become the richest entity in the world, regardless of the presence of Bitcoin or not.
There is a finite amount of Bitcoin total by nature of the protocol. The electricity company is vital to Bitcoin being usable since it's a digital currency. The miners might be necessary too, but they need huge amounts of electricity - which if they had to pay in Bitcoin, means they are paying some portion of the dwindling number of Bitcoins to the electricity company. As is every Bitcoin user. And every bit of Bitcoin they get is worth slightly more after they get it then it was when it was paid, so their purchasing power is going up and up and up. You can't even found a new electricity company and try to compete on price, because beyond some point the original buyer can buy your new cheaper electricity without measurably reducing their spending power, and to capture the market they need to somehow not enrich you too much while doing it. And then of course, best case you just have 2 big electricity companies controlling all the wealth forever. Deflationary currencies are bad.
> Your assumptions are all resting on the idea that Bitcoin can't be used to pay taxes. This is already pretty flawed in a few places where it is possible.
"Just in time" Bitcoin -> currency conversions do not count. They don't count because they depend on an exchange rate (and are provided by a private company in all examples). The government's tax office is not accepting Bitcoin - it's letting someone act as a payment provider but the payment provider is still paying them in the local currency (and taxes are being assessed in local currency, not Bitcoin).
If the price of Bitcoin collapses, you'll owe more Bitcoins. If my local currency collapses, I'm still only taxed on the portion of my earnings in that currency.
> But Bitcoin maximalists don't actually care about this government thing.
However governments care a lot if you don't pay your taxes. And the utilities care a lot if you don't pay them.
> And every bit of Bitcoin they get is worth slightly more after they get it then it was when it was paid, so their purchasing power is going up and up and up.
So you are saying that bitcoin would only ever become more and more valuable?
How can you similtaneously believe this statement, and that bitcoin is worthless?
They can't both be true. Either bitcoin is deflationary, IE, it goes up and up in value, and becomes more and more valuable, or it isn't.
Which is it? Is bitcoin worthless, or it is so extremely valuable and amazing, that it is going to take over the entire world with how deflationary it is?
Personally, I'd want to support something that you apparently believe is so useful that it is going to take over the world.
It's a fact about deflationary currency in general, and why it's a bad idea. It grants that for some reason we suppose Bitcoin is worth holding - i.e. some government or entity accepted Bitcoin (or another deflationary currency) as payment for taxes. Maybe someone builds a seasteading community and decides to try this.
The reality is, with nothing backing it (i.e. no government accepting it for taxes), it's not actually worth anything in the long run because eventually everyone has to cash out.
Which isn't to say it's not worth anything now - but the market is exploitative. The goal is to convince everyone to buy in, so those who are in can get out, hopefully taking a profit (not in Bitcoin) along the way.
My point, is that anyone looking at Bitcoin and wondering if they should enter it should absolutely not. Deflationary crypto is a rigged game in favor of those who got in first, and you can never catch up (barring their irrationality). Bitcoin's highs are not going to be repeated, and anyone asking you to buy in wants you to do so so they can get out.
But this is already happening. There are multiple places around the world that accept bitcoin to pay for their taxes.
> it's not actually worth anything in the long run because eventually everyone has to cash out.
Is gold worth nothing, because eventually people have to cash out? Gold is also deflationary.
What people need to understand is that deflationary currencies have existed for centuries. The idea of a federal reserve, constantly controlling inflation rates, is a new phenomenon.
People 200 years ago somehow survived with deflationary currencies.
I am in favor of free choice. And I see no reason why people shouldn't have the choice to own a deflationary currency. If you don't like deflationary currencies, all you have to do is simply not use it, and leave the rest of us who disagree alone.
> There are multiple places around the world that accept bitcoin to pay for their taxes.
No there are not. There are jurisdictions which sign agreements with Bitcoin exchanges to integrate them into the tax payment process. The exchanges must always be able to source enough local currency to meet the payment. The government does not accept and hold Bitcoin - the value of your taxable obligations, once determined, can change in Bitcoin with the exchange rate - whereas my tax obligations in local currency don't, provided I hold local currency.
> Is gold worth nothing, because eventually people have to cash out? Gold is also deflationary.
Gold is not used as a currency today. Neither is Bitcoin. The argument over deflationary currency presumes a world in which Bitcoin fulfills the stated objective of it's adherents as a currency.
Bitcoin and gold are both commodities today. As a commodity Bitcoin has very little to recommend it. Strictly speaking this is true of gold as well, but gold is historically very complicated, and has the benefit of being a physical resource which displays some physical scarcity (of note: gold as a currency isn't strictly deflationary, your inflation rate it just pegged to the rate of mining and discovery).
On gold as a currency - Middle Ages economies routinely bankrupted themselves by making huge windfalls in gold, and failing to recognize that all they'd done was drive a lot of inflation (i.e. the Spanish after they found the Americas - they didn't raise taxes, so the royal treasury found itself in debt even though by simple thinking they should've been very wealthy). Bitcoin has all these problems, but unlike gold also consumes resources to retain it's value. A block of gold after 10 years is still just a block of gold.
> I am in favor of free choice.
And I'm not arguing anything should be illegal. I am arguing rational people should recognize what Bitcoin is, and think carefully about how they value it. It is not what it's advocates say, and it is mostly powered by the reality that your average person does not think carefully about the nature of money very often.
You seem to think that utilities are monopolies (which is partly true in some cases, where they are granted such monopoly entitlements by a government), and they they don't have expenses. They're not at the bottom of the economy. They need to buy fuels, for example: so they spend money with the fuel companies. Well, the fuel company needs to buy ships, drills and whatnot, and pay its workers. They money comes back into the economy at some point.
If electricity providing is such a lucrative business, then there will be an extremely competitive market for providing that service, and no one company is going to be able to charge silly fees because they will make themselves obsolete. It is only through a government granted monopoly that such companies are able to exist.
Governments care that you pay your tax, but their ability to enforce their tax collection relies on violence, and ability to prove the taxes need paying. Bitcoin creates an economy where the latter is more difficult, perhaps impractical with more private technologies.
It might turn out that governments have to move to being more voluntary models of trade, else they might not be able to acquire enough taxes to fund their operations.
There is a finite amount of Bitcoin total by nature of the protocol. The electricity company is vital to Bitcoin being usable since it's a digital currency. The miners might be necessary too, but they need huge amounts of electricity - which if they had to pay in Bitcoin, means they are paying some portion of the dwindling number of Bitcoins to the electricity company. As is every Bitcoin user. And every bit of Bitcoin they get is worth slightly more after they get it then it was when it was paid, so their purchasing power is going up and up and up. You can't even found a new electricity company and try to compete on price, because beyond some point the original buyer can buy your new cheaper electricity without measurably reducing their spending power, and to capture the market they need to somehow not enrich you too much while doing it. And then of course, best case you just have 2 big electricity companies controlling all the wealth forever. Deflationary currencies are bad.
> Your assumptions are all resting on the idea that Bitcoin can't be used to pay taxes. This is already pretty flawed in a few places where it is possible.
"Just in time" Bitcoin -> currency conversions do not count. They don't count because they depend on an exchange rate (and are provided by a private company in all examples). The government's tax office is not accepting Bitcoin - it's letting someone act as a payment provider but the payment provider is still paying them in the local currency (and taxes are being assessed in local currency, not Bitcoin).
If the price of Bitcoin collapses, you'll owe more Bitcoins. If my local currency collapses, I'm still only taxed on the portion of my earnings in that currency.
> But Bitcoin maximalists don't actually care about this government thing.
However governments care a lot if you don't pay your taxes. And the utilities care a lot if you don't pay them.