be me, 14yo
mining with my shit GPU(can’t recall) in 2013
father smirks and says wouldn’t that just cost me more in electricity
me agrees, quits
nice job, dad
Anon gives up on Bitcoin in 2010
Submitted 3 months ago by Early_To_Risa@sh.itjust.works to greentext@sh.itjust.works
https://sh.itjust.works/pictrs/image/59b79001-730f-4892-b2c7-dc2b84ab2f90.jpeg
Comments
napkin2020@sh.itjust.works 3 months ago
bountygiver@lemmy.ml 3 months ago
I used it once when my rental’s heating was not working well so I used my GPU as a space heater, recoup more than 10x cost of the hardware by mining over half a winter.
humanspiral@lemmy.ca 3 months ago
your electricity, my bitcoin.
DankOfAmerica@reddthat.com 3 months ago
I don’t understand how bitcoin has value. I know the dollar has no intrinsic value either; we just all agree it does. But the difference between the dollar and bitcoin is that if you decide to stop trading using the dollar, you become a terrorist and get a free hellfire delivery. If you stop trading using the bitcoin, no one cares. How did this whole bitcoin to value begin? How does a brand new currency start without the backing of a state? Why does it keep having value? It’s interesting af.
Shteou@lemmy.world 3 months ago
After years of lurking and staying quiet on the subject, I’ll finally bite because it’s a valid question and the typical responses are usually poor quality. There will be simplifications, omissions, and errors, but hopefully you’ll find it useful nonetheless.
I’ll speak specifically to bitcoin, and ignore other crypto currencies where things get increasingly complex.
As you suggest, it has no intrinsic value just as the dollar doesn’t, in the sense it’s not backed by some physical asset.
Where does the value come from then? Value can be derived from your ability to transact with a currency. There can also be speculation around future value. Both are certainly true of Bitcoin, but it’s an evolving ecosystem. In the early days it was a novel idea and a very small number of people transacted with it and derived value that way. Since there’s a finite number of BTC value is driven up as more people want to hold it (regardless of whether that’s for transaction or speculation). During the silk road period (and to this day), the thought of a decentralised (and somewhat anonymous, let’s disregard the complexity and just say that people thought it was) currency would be great for buying and selling illegal goods and services. These transactions increased the value. Since then, there’s been a lot more mainstream interest in BTC, largely driving speculation but also transactability. Again, value increases under these conditions.
A lot of criticism of BTC is that it’s pure speculation and there’s little to no transactability. My thoughts on this is the majority of commenters are simply those that derive no benefit from transacting in a cryptocurrency. The USD, Euros, GBP are all amazingly transactable currencies, so why reach for crypto? The fact is, there are a lot of real world transactions happening with BTC and crypto in general. Several South American countries find themselves with a currency which is an incredibly poor store of value and BTC insulates it’s citizens from this. The remittances market is a huge cluster fuck of middlemen and fees, bitcoin is often a better deal.
All this is still changing though. Substantial amounts of crypto transactions are now facilitated by financial entities with improving KYC by firms like Chainalysis. Regulation is forming rapidly, recognising BTC like many other currencies or assets, ensuring that the majority is exchanged and transacted at regulated entities. Still volumes go up. There are more and more companies who will transact directly in crypto.
So I ask the question, if the trajectory of bitcoin is that more and more people are not just holding it, but using it… Why wouldn’t it be more valuable, why wouldn’t you have expectations of it like any young currency?
Re your point about trading in dollars. There’s plenty of states, entities and people who don’t use the dollar and they get on just fine. At a national level the US has a vested interest in ensuring a country does trade in dollars, or conversely making sure they can’t.
Now the USD is backed by the USA and that’s powerful, so how did BTC get started? It’s mostly the protocol. Miners find coins and get paid tx fees in exchange for securing the network against a sybil attack. We transact with BTC, or store it. Institutions are formed or pivot to support the ecosystem, the more people using it there more value there is in supporting it.
BTC is 16 years old now and it keeps having value because it’s valuable! Perhaps the greatest question is does the value outstrip the speculation? I won’t try to answer that, but we’ve seen a lot of crypto bubbles burst because of this… yet a few remain?
I’ll stop here because I could keep expanding and refining, but I have a dinner to go to. Hope this helped in your understanding!
DankOfAmerica@reddthat.com 3 months ago
Thank you very much! That all makes sense to me. I think I have a basic understanding of why bitcoin can be an effective currency, but I’m still unsure about the very beginnings though. I don’t understand how it took hold. Was it just a small group of friends that were pretend-trading with each other? Even if it was great for illegal trades, how did it start? There had to have been at least 3 entities: 1) buyer, 2) seller, & 3) somewhere for seller to spend gains.
I hadn’t thought of the impact that being decentralized would have. If people like somewhere where inflation is going wild, bitcoin is a better option. Now, I want to see a graph of the value of bitcoin vs. the US dollar especially during and after COVID.
we’ve seen a lot of crypto bubbles burst because of this… yet a few remain?
Considering that even government-backed currencies have lost their value, I am willing to bet that there are powerful people supporting bitcoin. Otherwise, people would just be bouncing around cryptocurrencies like a casino.
KillingTimeItself@lemmy.dbzer0.com 3 months ago
bitcoin has value because people perceive it to have value.
Basically, it went from like 10 people using it, where it was functionally worthless, to like 10 million people using it, where it’s value per bitcoin increased by one million fold.
net money in = net money out, the early investors are just reaping the rewards of other people investing their money into it (and then losing it)
merc@sh.itjust.works 3 months ago
bitcoin has value because people perceive it to have value.
Bitcoin has value because they think other people perceive it to have value. Same with dollars, euros, pesos, etc. It’s not like art where the value is in the eye of the beholder. It’s something where you have to be confident that other people will perceive it to have value too, so when you want to exchange it, there will be other people who will accept it.
Dollars, euros, pesos, etc. have value because they’re accepted in thousands of stores, and because you need them to pay your taxes. Even if you, personally, don’t think you’ll need to hold onto any pesos to pay your own taxes, you know that there are likely to be millions of other people who will need them for their taxes.
With bitcoin, there are essentially no places you can use it to pay taxes, except maybe El Salvador (I don’t know if they’re still doing that). You can’t use it to pay in many stores. Just about the only thing that keeps creating demand for bitcoin is that there aren’t many other ways to pay off ransomware demands. Unlike traditional currencies, Bitcoin really relies on the belief that someone else will continue to believe that Bitcoin is still valuable.
Will the bubble eventually burst? I think so. I just think it could stagger on for a few more decades before the belief it has value eventually collapses.
31337@sh.itjust.works 3 months ago
In the early days, the Bitcoin community was very ideological (and I guess a lot of it still is). Libertarian, Mises Institute, Ayn Rand, abolish the Fed types. People actively willed-it into having value (e.g. setting up a pizza delivery for 10,000 BTC). It’s specifically designed to be “digital gold,” where the amount that can be mined decays logarithmically over time, so supply is effectively constrained (very much so now), and the more people that want to buy it, the more it’s worth, because that means you need to find people willing to sell it at a particular price. If you were to think of it as a currency, it would be a disinflationary currency, or effectively deflationary (because coins get “lost”). This gave and gives people that hold Bitcoin financial incentive to proselytize Bitcoin so their holdings are worth more. Overall, it’s a pretty stupid idea, IMO, and the crypto space is full of mostly scammers and grifters now. A deflationary currency is a really bad idea under capitalism, since it encourages people to just hoard the currency instead of loaning it out, investing in new businesses, etc. Gold is also a horrible currency, which is why no country uses it as such, or even backs its own currency with gold anymore.
madejackson@lemmy.world 3 months ago
While deflation is probably not helping markets, VAT is magnitutes more hurtful. Still widely used in most countries :( humankind is stupid Due to recent events: tariffs are even worse than both deflation and vat.
LibreHans@lemmy.world 3 months ago
I don’t understand how bitcoin has value
The first major use case were donations to wikileaks, because the existing financial system shut them out. Recently, the Americans shut Russia out of the financial system and stole their money. Escaping financial repression is valuable (even if you don’t agree that people should be able to escape).
DankOfAmerica@reddthat.com 3 months ago
oh shittttt. this is getting interesting. i got obsessed with the Russia bs when Ukraine was first invaded, but I slowly lost interest because all things psychopath just get me too upset. but it’s back to the rabbit hole! ✌
lime@feddit.nu 3 months ago
drugs. the answer is drugs.
admin@sh.itjust.works 3 months ago
Thats Monero my sweet summer child.
rbesfe@lemmy.ca 3 months ago
More specifically it’s international crime organizations using it as an alternative to moving cash across borders
SoftestSapphic@lemmy.world 3 months ago
It has value because people are dumb and want a magic way to escape having to contribute to a society that doesn’t reward them for it
Aggravationstation@feddit.uk 3 months ago
They also want an anonymous way to buy drugs
captainlezbian@lemmy.world 3 months ago
The US dollar actually has a basis for its value. It’s the only currency the us government accepts payment in
nutsack@lemmy.world 3 months ago
A Bitcoin is a contract. just like a dollar
reksas@sopuli.xyz 3 months ago
once you get the ball rolling it will keep rolling. That is what all those other coins are trying to do, though they settle for pump and dump too.
Dragon@lemmy.ml 3 months ago
It has value because it can be exchanged for dollars. It originally could be exchanged for dollars because people believed in it the same as a God. It is a simulacrum of dollars that became hyperreal.
index@sh.itjust.works 3 months ago
I don’t understand how bitcoin has value.
Study how they work. You are on lemmy a dencentralized and open source platform.
LodeMike@lemmy.today 3 months ago
The difference is that the US government can just print money whereas the supply of BTC is limited.
adarza@lemmy.ca 3 months ago
220 coins is about 22m usd today. the guys with ‘vintage’ btc and held, are smart. they won’t be posting about their gains online.
proceduralnightshade@lemmy.ml 3 months ago
We may or may not have used bitcoin to buy substances and weed on silk road and… I think it was dream market, not sure, back in the day. 1 bitcoin was ~350€ at that time. I watched bitcoin become more and more valuable and less and less usable over the years, which at first I thought was very odd, until I realized that everything that roughly resembles a stock market is more or less mostly used by gamblers.
kameecoding@lemmy.world 3 months ago
Bitcoin is now literally digital gold, it has absolutely no value other than scarcity and you betting on people thinking it will be more valuable in the future, it’s a money store, where you hopefully don’t lose money, or don’t accidentally click on a link that loses you all of your money, but most of bitcoin was bought ip by wallstreet and they built etfs around it, so it’s not as much of a risk as it used to be, I still wouldn’t touch it
index@sh.itjust.works 3 months ago
Bitcoin is now literally digital gold, it has absolutely no value
It is the fastest and more reliable way to send money to someone in russia, iran or venezuela or to anyone in the world if you want to rely on a decentralized open source system like the one you are on.
dharmacurious@slrpnk.net 3 months ago
A buddy of mine offered to sell him his 3 Bitcoin for a pack of cigarettes back in the day. I bought him the pack and told him to keep the coins, I wouldn’t know wtf to do with them
In fairness, neither of us are rich now. I’m a broke mfer, and he lost the thumb drive his shit was on
bradd@lemmy.world 3 months ago
[deleted]IMongoose@lemmy.world 3 months ago
Ya, I saw an article when Bitcoin was very new, like 10 cents each, and it said Bitcoin was stupid as a currency because there is a limited number of it and it will only increase in value which will cause people to horde it making it not valuable as a currency. They were kinda right tbf, it’s not a good currency.
I decided not to mine it because it would have cost as much in electricity as it was worth and the only thing I could buy were drugs which I don’t use.
Gullible@sh.itjust.works 3 months ago
Still no clue why it’s so popular while my beanie babies languish. Can’t you use beanie babies to buy drugs? Please?
humanspiral@lemmy.ca 3 months ago
It might have taken days to get 50 btc… on a laptop back then.
kandoh@reddthat.com 3 months ago
I bought some mdma in 2016 with Bitcoin, if I’d kept it in a wallet it would have been worth 40k today.
admin@sh.itjust.works 3 months ago
I bought some $300 DC Shoes and T shirts but I was like 15 years old lmao. It’d be like 20k last time I did the math.
nonfuinoncuro@lemm.ee 3 months ago
I bought a t shirt for 2 btc fml
ryven@lemmy.dbzer0.com 3 months ago
My friend tried to convince me to get into bitcoin early and I didn’t bother, I thought it was just a fad, like my mom “investing” in Beanie Babies.
He spent all his on drugs before the price took off though. ¯\_(ツ)_/¯
Saledovil@sh.itjust.works 3 months ago
The problem with statements like “If you invested in Bitcoin back in 2009 you’d be rich now” is that you’d have to be clairvoyant to actually know that back then. And if you’re clairvoyant, the lottery offers a better return on investment than bitcoin.
kameecoding@lemmy.world 3 months ago
In fact saying stuff like this is literally like seeing the winning lottery numbers on the telly and thinking, if only I played those numbers two days ago.
humanspiral@lemmy.ca 3 months ago
You could understand the potential without psychic skills.
LibreHans@lemmy.world 3 months ago
Hm wat? It’s obvious that something useful and scarce will always go up against money a central bank can create out of thin air.
Gutek8134@lemmy.world 3 months ago
I’m not sure which meaning of “drug” makes it worse
jballs@sh.itjust.works 3 months ago
I had a cowoker who used to mine bitcoins back then. He said that it was a fun hobby but when he was moving to California he didn’t think he would be able to make enough money to justify the higher electrical bill.
He was making about $60 a month farming Bitcoin, when it was $0.30 a piece. Had he kept just a month’s worth of that, it would be worth $20.5 million dollars.
50MYT@aussie.zone 3 months ago
I used to mine them with cpu / GPU.
I bought a bottle of Jim beam for 25 BTC lol.
jballs@sh.itjust.works 3 months ago
Just did the math. That’s $2.5 million today. Oooof
stevedice@sh.itjust.works 3 months ago
Remember the kind of people who got really into NFTs? That’s exactly the kind of people who got really into bitcoin 15 years ago, they just happened to get extremely lucky. There’s a reason why most bitcoin millionaires are such incompetent douchebags.
LibreHans@lemmy.world 3 months ago
The cope. Nobody could have predicted this! Except all the people who predicted it. But that was just luck!
SatansMaggotyCumFart@lemmy.world 3 months ago
Doge is going to be worth $100,000 apiece soon and then you’ll see.
boboliosisjones@feddit.nu 3 months ago
Realistically there wasn’t that much to lose if you mined instead of invested. NFTs is a different story.
DavidDoesLemmy@aussie.zone 3 months ago
How many Bitcoin millionaires do you know? Do you think there’s a selection bias there and only the douchbags make a big song and dance about it.
stevedice@sh.itjust.works 3 months ago
More than I’d like to.
index@sh.itjust.works 3 months ago
You are comparing lemmy with threads. The average bitcoin millionare probably knows the difference.