For some further read up on how humans may see Bitcoin, see this and this.
Recently, Hugo Salinas Price posted an article which can be regarded as semi-negative about Bitcoin. The main proposition of the article is that the value of Bitcoin is nothing more than a commonly shared belief among men. He is kind enough to point out that the same goes for fiat currencies, but thinks that the belief in cryptocurrencies will fade sooner than the belief in fiat currencies. His main argument is that cryptocurrencies do not have Central Banks acting as shepherds. Therefore, in his reasoning, belief in cryptocurrency (that has no shepherds or, at least, central shepherds) will vanish sooner than fiat currency.
My counterthought is: why does he think the lack of a (central) shepherd is a problem? I think the absence of a central shepherd is quite the opposite: it is a feature of cryptocurrency, and the lack of a Central Bank for cryptocurrency will only do it good instead of bad.
This concept of 'belief' resonates very much with the articles that I linked above (here and [here]). A good analogy is the value of pieces of art. We know the value of a Stradivarius violin does not represent the material value of the asset. There are equally good (or even better) violins available at a fraction of the price. All that does not matter. It is the belief that the Stradivarius is valuable that counts. The belief of men that other men will also think that (again) other men consider the Stradivarius to have a high value is enough .... for the Stradivarius to have that value. But once someone knows it is a forgery, suddenly the rational mechanism works again and the violin may still be quite valuable (as a good copy) but way less. So belief is very common among men and a core aspect of valuing things.
So Hugo is right in the idea that value is just a belief, but I think he is wrong in thinking that value needs a central shepherd. Value does not need a shepherd, but belief. Given the fact that Stradivaruis, paintings and historical cars retain their value (with ups and downs) for lenghts of time already (and when looking at history, other examples can be found), belief of the crowd could be enough to retain the belief for a long time.
But perhaps Hugo expects the crowd to suddenly switch from belief thinking to rational thinking in respect of the Mona Lisa soon. Who knows (Hugo does not explain).
Anyway, I thank Hugo for bringing up this concept of value again in the field of Bitcoin. I am fascinated by the proof that humans can start to value anything, literally anything, very quickly even if rational thinking would have one dismiss it right out of hand. The 700+ altcoins still trading with enthousiastic communities prove this. For me this is an example that we, humans, are able to cooperate very easily and with a very low barrier for entry. This is proof that we do not need a central shepherd (Central Banks, but also government) as much as we perhaps think we do.
Yes anything can be used as money as long as whoever trades with it all has the same faith in it. I wasn't trying to be negative towards bitcoin. The fact that you cant see or hold a bitcoin or a fraction of one. Some people like to argue is a bad thing. I think it is an advantage and should be embraced.
why not?
why not what?
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For some further read up on how humans may see Bitcoin, see this and this.
Recently, Hugo Salinas Price posted an article which can be regarded as semi-negative about Bitcoin. The main proposition of the article is that the value of Bitcoin is nothing more than a commonly shared belief among men. He is kind enough to point out that the same goes for fiat currencies, but thinks that the belief in cryptocurrencies will fade sooner than the belief in fiat currencies. His main argument is that cryptocurrencies do not have Central Banks acting as shepherds. Therefore, in his reasoning, belief in cryptocurrency (that has no shepherds or, at least, central shepherds) will vanish sooner than fiat currency.
My counterthought is: why does he think the lack of a (central) shepherd is a problem? I think the absence of a central shepherd is quite the opposite: it is a feature of cryptocurrency, and the lack of a Central Bank for cryptocurrency will only do it good instead of bad.
This concept of 'belief' resonates very much with the articles that I linked above (here and [here]). A good analogy is the value of pieces of art. We know the value of a Stradivarius violin does not represent the material value of the asset. There are equally good (or even better) violins available at a fraction of the price. All that does not matter. It is the belief that the Stradivarius is valuable that counts. The belief of men that other men will also think that (again) other men consider the Stradivarius to have a high value is enough .... for the Stradivarius to have that value. But once someone knows it is a forgery, suddenly the rational mechanism works again and the violin may still be quite valuable (as a good copy) but way less. So belief is very common among men and a core aspect of valuing things.
So Hugo is right in the idea that value is just a belief, but I think he is wrong in thinking that value needs a central shepherd. Value does not need a shepherd, but belief. Given the fact that Stradivaruis, paintings and historical cars retain their value (with ups and downs) for lenghts of time already (and when looking at history, other examples can be found), belief of the crowd could be enough to retain the belief for a long time.
But perhaps Hugo expects the crowd to suddenly switch from belief thinking to rational thinking in respect of the Mona Lisa soon. Who knows (Hugo does not explain).
Anyway, I thank Hugo for bringing up this concept of value again in the field of Bitcoin. I am fascinated by the proof that humans can start to value anything, literally anything, very quickly even if rational thinking would have one dismiss it right out of hand. The 700+ altcoins still trading with enthousiastic communities prove this. For me this is an example that we, humans, are able to cooperate very easily and with a very low barrier for entry. This is proof that we do not need a central shepherd (Central Banks, but also government) as much as we perhaps think we do.
And that gives positive energy for the future.
Yes anything can be used as money as long as whoever trades with it all has the same faith in it. I wasn't trying to be negative towards bitcoin. The fact that you cant see or hold a bitcoin or a fraction of one. Some people like to argue is a bad thing. I think it is an advantage and should be embraced.
That makes absolutely no sense.
Genius noted I've naturally upvoted and followed.
Hows it make no sense do you have any gold?
Do I have any gold? Are you kidding me?
I INVENTED GOLD!!!
(No, no, I don't have any gold...)
Well then of course it makes no sense you don't have to protect something you don't have.
"A cryptocurrency through the human eye does not exist"
It does on my nano and shines bright green