The value of bitcoin will never be zero because permissionless transfer of wealth has value. Hopefully the reason for this is obvious but if not I can explain.
The politicians and the fed are GOING to inflate the currency. (IMO) It's a 100% certainty. When they do, that hurts the value of your savings and labor. Why would I have my savings in a currency that's losing its value? You want savings to GROW, and 0.5% on your money isn't cutting it.
This brings us back to permissionless transfer of wealth. I don't need a bank. I don't need blessing of anybody at all to use bitcoin. Although I'm American myself, I understand how much this means in the rest of the world. (Who, by the way, are also suffering under governments debasing the central currency)
Now, it's down to each individual person to decide if their government is ruining the value of their money fast enough to take a risks on something like bitcoin. People in Venezuela made a different calculation than the average American does, because they more directly see the effects of inflation. Although a lot of Americans are seeing this now as government floats the idea of even more multi-trillion-dollar bills. Americans also have the option of the stock market or land purchases, which are also completely reasonable choices.
The value of bitcoin is derived completely on trust, I 100% agree with that. But I would rather have a system that's ruled by math than ruled by people. Because it seems that when you have rule by people, the printing never stops until the currency collapses.
As always, I am open to the argument that we will reign back the money creation.
Remember when our saving were "only" getting 6% interest, and then they were "temporarily" cut to 0.5% on a "temporary basis" only ? Seems that "temporary" is a euphemism for "permanently".
What happens to Bitcoin when there's a liquidity crunch and people need cash?
Remember, Bernie Madoff's empire was worth tens of billions of dollars... until the economy stumbled and people all wanted to cash out at the same time.
That happened last year, as a matter of fact. People were getting freaked out about having enough cash through the uncertainty of corona. The value plunged to just $4000. And then guess what happened?
The fed said that they would print as much money as needed to handle the crisis. Trillions and trillions of dollars rained down on the politically connected like manna from heaven. Now the price of a bitcoin sits at $47,765. (Almost 12x gains)
Guess what will happen the next time the financial sector is in trouble? I know where I'm putting my money, and it's not on the dollar.
And this is just my American perspective. As I said, in other countries the math is even more convincing.
Edited for correct figures. Hard to believe that March 2020 was last year :/
As soon as the banksters piled in, I stopped worrying about regulation-to-the-point-of-extinction. As long as government is set up to get their cut, they'll be fine.
After all, the banksters need a way to protect their wealth as well. And they're the ones who get to write the rules.
I had these same exact questions when I first started reading about bitcoin, so I have no problem helping people with the answers so they can understand as well.
If all the computers in the world no longer function I have a lot bigger problems than my bitcoin being gone. That's a post-apocalyptic scenario where your dollar or your gold coin will be worthless as well. If you're worried about this situation, buy all the food and ammo you can.
The reason that bitcoin will never be valueless is because it facilitates permissionless transfer of wealth -- regardless of the price. Bitcoin "works" just as well at $47 as $47000 (and maybe better). It enables the unbanked access to this worldwide system. The people in Venezuela understand what happens when the government ruins the value of their money. That's why their relatives send bitcoin now.
The destruction of the dollar is slower but no less certain (barring a Ron Paul clone, and there's no political appetite for that).
'If all the computers in the world no longer function I have a lot bigger problems than my bitcoin being gone.'"
Rather beside the point, isn't it? The point was that, whatever other problems you'd have in those circumstances, your BitCoin "wealth" would also be forfeit.
You can ride the dollar all the way to zero if you want.
Yep, and you can have the same experience with bitcoin.
Seriously, give me a reason bitcoin is more "concrete" than the dollar -- for that matter gold.
As for not being able to seize bitcoin from you -- wanna bet?
The value of bitcoin will never be zero because permissionless transfer of wealth has value. Hopefully the reason for this is obvious but if not I can explain.
The politicians and the fed are GOING to inflate the currency. (IMO) It's a 100% certainty. When they do, that hurts the value of your savings and labor. Why would I have my savings in a currency that's losing its value? You want savings to GROW, and 0.5% on your money isn't cutting it.
This brings us back to permissionless transfer of wealth. I don't need a bank. I don't need blessing of anybody at all to use bitcoin. Although I'm American myself, I understand how much this means in the rest of the world. (Who, by the way, are also suffering under governments debasing the central currency)
Now, it's down to each individual person to decide if their government is ruining the value of their money fast enough to take a risks on something like bitcoin. People in Venezuela made a different calculation than the average American does, because they more directly see the effects of inflation. Although a lot of Americans are seeing this now as government floats the idea of even more multi-trillion-dollar bills. Americans also have the option of the stock market or land purchases, which are also completely reasonable choices.
The value of bitcoin is derived completely on trust, I 100% agree with that. But I would rather have a system that's ruled by math than ruled by people. Because it seems that when you have rule by people, the printing never stops until the currency collapses.
As always, I am open to the argument that we will reign back the money creation.
@Simulation Commander
Remember when our saving were "only" getting 6% interest, and then they were "temporarily" cut to 0.5% on a "temporary basis" only ? Seems that "temporary" is a euphemism for "permanently".
They can't cut back on the printing or the whole house of cards will collapse. They are floating the idea of NEGATIVE rates in some places!!!!
What happens to Bitcoin when there's a liquidity crunch and people need cash?
Remember, Bernie Madoff's empire was worth tens of billions of dollars... until the economy stumbled and people all wanted to cash out at the same time.
That happened last year, as a matter of fact. People were getting freaked out about having enough cash through the uncertainty of corona. The value plunged to just $4000. And then guess what happened?
The fed said that they would print as much money as needed to handle the crisis. Trillions and trillions of dollars rained down on the politically connected like manna from heaven. Now the price of a bitcoin sits at $47,765. (Almost 12x gains)
Guess what will happen the next time the financial sector is in trouble? I know where I'm putting my money, and it's not on the dollar.
And this is just my American perspective. As I said, in other countries the math is even more convincing.
Edited for correct figures. Hard to believe that March 2020 was last year :/
Fair point, I think you're right that it will never go to zero. If you get in and out at the right times you can make a killing.
My other concern is regulatory risk. But that may not be a factor if the banksters pile in.
As soon as the banksters piled in, I stopped worrying about regulation-to-the-point-of-extinction. As long as government is set up to get their cut, they'll be fine.
After all, the banksters need a way to protect their wealth as well. And they're the ones who get to write the rules.
Facts?
Begone, thot!
(Fun fact: I posted that, then your original post vanished. I lol'd.)
I had these same exact questions when I first started reading about bitcoin, so I have no problem helping people with the answers so they can understand as well.
Yeah. It's pretty wild stuff. I'm excited about it.
Look, excuse me for being really stupid but bitcoin is just an algorithm on some computer some where right?
Just for argument, lets say all the computers in the world no longer function.
Now, where is your wealth in bitcoin?
You said that I could ride my dollar to zero. Seriously, why can't that happen to bitcoin?
Let's travel back to a caveman.
Is he going to take your bitcoin?
Is he going to take my dollar?
Is he going to take charlie's gold?
The obvious answer is no.
So maybe when I talk about money, I don't make this point obvious?
If all the computers in the world no longer function I have a lot bigger problems than my bitcoin being gone. That's a post-apocalyptic scenario where your dollar or your gold coin will be worthless as well. If you're worried about this situation, buy all the food and ammo you can.
The reason that bitcoin will never be valueless is because it facilitates permissionless transfer of wealth -- regardless of the price. Bitcoin "works" just as well at $47 as $47000 (and maybe better). It enables the unbanked access to this worldwide system. The people in Venezuela understand what happens when the government ruins the value of their money. That's why their relatives send bitcoin now.
The destruction of the dollar is slower but no less certain (barring a Ron Paul clone, and there's no political appetite for that).
"SimulationCommander
Aug 14
'If all the computers in the world no longer function I have a lot bigger problems than my bitcoin being gone.'"
Rather beside the point, isn't it? The point was that, whatever other problems you'd have in those circumstances, your BitCoin "wealth" would also be forfeit.
And so would your dollars.
If you want to live your life around that scenario go ahead.
There ya go. You agreed that the world can go to hell so that no money will have any value and then you tell me bitcoin will never be valueless.
Bitcoin on top of an even more tenuous structure than the dollar.
The "value" of bitcoin is only registered as its exchange rate for a dollar.
Bitcoin, IMHO, will lose value much more rapidly than the dollar. But my opinion in this case is just as worthless as your's.
........................okay then.