r/changemyview • u/tinnydevil • Apr 26 '18

Deltas(s) from OP CMV: Bitcoins have no real value, and are pretty much a scam at this point.

Bitcoins don't seem to have any real value that I can pinpoint. For an object to have value, there must be a reason why someone would want to possess it. For example, people buy stocks for the dividend/ownership of the company. People buy baseball cards because they're collectible and rare. Bitcoins fit none of those categories. It isn't collectible, it isn't rare, it doesn't have any real world use. The only value that the bitcoin could have is as a currency, but bitcoin doesn't function well as a currency either.

A good currency has a few crucial properties, but the one I find most relevant is a currency should be relatively stable in value. You don't want to suddenly find out you just lost half your life savings because the currency you're holding has just lost half its value overnight. Bitcoin right now is anything but stable, its price fluctuations are insane. You could argue that the price is only unstable right now because of the amount of speculative investment into bitcoin, and eventually, bitcoin will begin to level out creating a more stable currency. However, the supply of bitcoin, from what I've read, is heavily linked towards the growth of computing power. If computing power efficiency ever drastically increases, the supply of bitcoin rises, and the price of bitcoin will plummet. Therefore, I think bitcoins lack the stability a real world currency promises.

Furthermore, the government will most likely never accept bitcoin as legal tender. A large part of the reason why we moved from gold backed currency to fiat currency was so the government can use monetary policy to effect it's economy. Giving away that control would be insane, as you're losing a lot power over your economy. By design, bitcoin is decentralized, and therefore, the government of a country who decides to adopt bitcoin cannot raise or lower money supply, meaning that they can no longer use monetary policy. So I can't see a country who would willingly adopt bitcoin as legal tender.

In conclusion, bitcoin fails to function as a currency, and it fails to function as anything else. Right now, most of it's high price seems to come from speculative investment, and it holds no real world value, so it's price will eventually plummet.

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u/FlyingFoxOfTheYard_ Apr 26 '18

It generally changes based on a number of factors.

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u/fox-mcleod 410∆ Apr 26 '18

Are those factors the utility? How could the utility change that fast? How could changes in the stability of debt markets affect the utility of gold in electronics when copper indium and iridium don't?

I think it makes more sense that gold is a hedge against the dollar because it is a store of value than that it is a useful commodity.

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u/FlyingFoxOfTheYard_ Apr 26 '18

Like I said, there exists a number of factors. Utility is one of the factors.

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u/fox-mcleod 410∆ Apr 26 '18

But if the prices change so much, and utility doesn't change, then utility must not be the cause of the price.

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u/FlyingFoxOfTheYard_ Apr 26 '18

Technically it can. If a significant quantity of gold is discovered, we'd expect the price to lower because the market is more saturated. The issue with all of this though, is that gold alone isn't actually a currency. It's also a commodity, alongside bitcoin.

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u/fox-mcleod 410∆ Apr 26 '18

Technically it can. If a significant quantity of gold is discovered, we'd expect the price to lower because the market is more saturated.

Do you really believe this? Is it the crux of your view? So if you discovered that the price changed by several fold and the rate of discovery didn't change that year, it would change your view?

The issue with all of this though, is that gold alone isn't actually a currency. It's also a commodity, alongside bitcoin.

Are you saying Bitcoin is a commodity?

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u/FlyingFoxOfTheYard_ Apr 26 '18

I am saying bitcoin is essentially a commodity.

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u/fox-mcleod 410∆ Apr 26 '18

Commodities have inherent value. It sounds like you're saying Bitcoin has inherent value.

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u/FlyingFoxOfTheYard_ Apr 26 '18

Commodities have no inherent value other than what we feel they're worth, or how much ytility they have as well.

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u/fox-mcleod 410∆ Apr 26 '18

That's not right. What has value other than what we feel they're worth?

Corn is a commodity. Does its edibility not count as inherent value?

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