2 Simple Ways to Explain Where Bitcoin (BTC)s Value Comes From
How to explain Bitcoin (BTC) to an asshole
I get a lot of questions about where the value of Bitcoin is derived.
I love this question.
Mostly because people tend to ask this question to me as more of a challenge than an actual conversation starter.
When I’m at a dinner or gathering and someone (usually someone a few years older than me, bonus points if they’re in Finance) will typically start a conversation about blockchain, cryptocurrency, or more specifically, Bitcoin.
For these circumstances I have developed two forms of answers.
One is based heavily on a linguistic tool discovered in the 20th century, sarcasm, and another coming from a more genuine and helpful place in my tiny little heart.
“How can you invest in Bitcoin? It’s all just a bubble, there’s no actual value in any of it. It’s intrinsically worthless.”
The game is afoot.
I think to myself.
“What do you mean intrinsically worthless?”
I respond, calmly eyeing my butter knife.
“Well, the U.S. Dollar has intrinsic value from being tied to our government. The government guarantees that currency will hold a certain amount of value. You can pay your bills with dollars. You can pay taxes with dollars. Who guarantees Bitcoin?”
“No one.”
I say, my hand inching closer and closer to the butter knife.
“Exactly!”, the dinner party asshole exclaims.
Let’s call him, Jarret.
“The U.S. government is currently 20 Trillion USD in debt. It doesn’t appear that company you put your trust in manages money very well. What would happen if the U.S. were too, I don’t know, do something insane: like allow the housing market to collapse?
Further, no one guarantees Bitcoin because NO ONE HAS TO. Both the U.S. Dollar and Bitcoin gain their value from trust. The dollar from trust in the government. Bitcoin from trust in the fact that complete transparency removes the factor of “trust” out of financial transactions.
I don’t trust anyone because I don’t have to, the technology is completely open sourced, there are a copious amount of people getting paid to verify the public ledger (which is another source of value but more on that later), and anyone at any time can see all of the transactions ever made with Bitcoin.”
I take a break from my monologue to glance back down at my butter knife.
Turns out I won’t need you after all old friend. This duel of wits has met its end.
“Bitcoin gains value in the same way that anything gains value. Supply and demand. Are you telling me that gold is intrinsically worthless because it’s not guaranteed by a government?
Oh wait, gold is worthless.
The only reason gold has value is because WE GAVE IT VALUE.
We used to buy sh*t with shells.
SHELLS JARRET.
How is it more difficult to believe that ‘a digital currency with a completely transparent public ledger, that is built with the closest tech we’ve created to being un-hackable has value, than it is to believe that at one point in history someone probably paid for sex with 10 conch shells.”
“Well geez Reza it was just a ques-”, Jarret muttered before I cut him off, butter knife waving fearlessly in front of me as if to better illustrate my points.
“CONCH SHELLS JARRET!
Money is defined by five characteristics:
- Scarcity
- Fungibility
- Divisibility
- Durability
- Transferability
So if it looks like an idiot, smells like an idiot, THEN YOU’RE A IDIOT JARRET”.
Jarret looked down at his half eaten salad in what seemed like sadness for about 45 seconds. Then, the almost-sadness turned to anger, and he looked up at me, fire in his eyes.
“If Bitcoin is so great and trustworthy then why is it used to buy drugs? If it’s so transparent then why do criminals always ask for ransoms in Bitcoin?”
Jarret sputtered out, veins starting to throb on his shining forehead.
“BECAUSE THEY’RE IDIOTS JUST LIKE YOU JARRET.
First of all, 90% of dollar bills in circulation have traces of cocaine on them, and despite my best efforts none of the drug dealers I know will accept Bitcoin. The U.S. dollar is used to buy and sell drugs every single day.
If you’re referring to the the Silk Road, that doesn’t exist anymore.
There are other illegal marketplaces on the dark web now but even they realized that you’re an idiot and stopped using Bitcoin, they now use actual anonymous currencies like Monero and Dash.
Second of all, criminals ask for ransom in Bitcoin because they’re stupid. When law enforcement catches up on blockchain technology and realize how easy it is to track money on a public ledger, it’s game over for those guys.”
It’s at this moment that Jarret’s fight or flight instincts kicked in.
He jumps out of his chair, reaching for what I only assume is a firearm. I calmly cock back my arm and ninja-star hurl my fork. End-over-end it cuts through the air, eventually striking him squarely between his eyebrows.
Jarret collapses to the floor and all the attendees at the party crowd around me, telling me how I saved the day.
“Now that’s what I call a hard fork.”
I mutter with a Han Solo half-cracked-smile.
Published at Sat, 13 Jul 2019 08:05:20 +0000
Bitcoin Pic Of The Moment
By gilvalentine1227 on 2014-02-12 09:24:46
