It definitely does because there were a dozen attempts to create digital money but Bitcoin was the first to succeed thanks to it's decentralized nature. POW is not ineffective, it's the only way to secure the network and create a valuable asset. You cannot create money out of thin air.
Except you can create money out of thin air. All modern currency is made up. It's worth exactly the paper and ink used to print it. The rest is pure belief.
The magic of Bitcoin is that it is the purest essence of fiat. It is inherently useless. It's value derives from pure belief and the electricity used to compute the block hashes. It's no more or less valuable than other fiat currencies.
The decentralization argument also doesn't make much sense to me. Where does the electricity come from? Where do the computers for mining come from? Bitcoin is as centralized as any other resource that relies on centralized governments to operate. When Bitcoin believers can show me decentralized power plants I will start believing. Before you say solar power I will say the sun is the ultimate centralized resource.
Well, it is infinitely less valuable, because "currencies" are backed up by States. A currency only exists as far as a State (that is by definition indefinitely solvable, hence the ability to create money out of "thin air") backs it up. Bitcoin pretends it's a currency but it's nothing but a commodity. And if it were to become close to acting like a currency it would quickly become illegal to use it, because States don't like non-state actors to tread on their prerogatives.
Also, the amount of CO2 that's created because of BC is an insult to the human species and to Earth. If only for that it should be criminal to trade it.
Lol, so you say that currencies did not exist before nation states and central banks? Have you ever heard of gold? Have you ever heard of entire history without state monopoly on money that existed before 20th century?
Currencies are not backed by states, they're backed by nothing. Central bank can "print" as much as it want and destroy the whole economy. Just look at Venezuela and Zimbabwe.
Bitcoin is a realization that money cannot be handled by states.
No, I say that currencies are backed by a central authority. And that's a constant in human history. And that's also the characteristic of currencies. Currencies exist because the central authority that backs them is trusted to always be solvent, and that's possible because by definition such central authorities, States in the 20th-21st century are not considered to possibly disappear. Unlike banks, unlike individuals, etc.
Bitcoin is the realization that scams have fully entered the 21st century. And if Bitcoin were not a scam, do you think that places like GS would have any interest in it?
False. Currencies were not backed by central authority before the decline of golden standard in 20th century. Before that, every bank note and every coin was exchangable for a piece of gold if the currency was based on gold standard. No central banks existed! Also no hyperinflations... Fiat is the largest scam ever made.
What? Essence of fiat? You cannot create Bitcoin out of thin air, you have to mine it while following the same exact rules as everyone else. And it's not cheap. If it was fiat, it would be free to create new Bitcoins.
So Bitcoin is decentralized because there is only one Sun and only state electricity. Sigh. And how does any of this have any control over Bitcoin?
Let's follow the logic. Fiat money is anything without intrinsic value. A strawberry has intrinsic value because I can eat it. Wood has intrinsic value because I can use it to make a fire. Water and salt have intrinsic value because I need them to stay alive. Plenty of things have intrinsic value because they can be used independently of people's beliefs. Makes sense so far yes?
What is the intrinsic value of hashes generated by Bitcoin miners? That's what fiat means. It means it is a fiction that only has value if other people agree. Bitcoin miners have agreed to a set of rules for generating some numbers. There is no intrinsic value associated with the Bitcoin mining process.
Something has value if it checks these two characteristics: scarcity & utility.
Bitcoin is scarce because there will ever be only 21 million Bitcoins. Not more.
What about utility? Bitcoin could become global reserve currency, capable of being transferred around the world in minutes (not days) and capable of being unconfiscable while holding its value.
It has nothing to do with fiat.
Well, that's the trick, your argument about utility is that "Bitcoin could become a global reserve currency". Right now it isn't and thus has no utility and consequently has no value. And the thing is that Bitcoin can't become a global reserve currency, because State agents (and their sovereign people) won't allow that.
Bitcoin has utility. Ask people in Venezuela that buy Bitcoin everyday to save some money because their currency is worthless and more worthless everyday. Even now, when I want to send money to anyone on the other continent, I would choose Bitxoin because it's faster and uncensorable.
How will states ban Bitcoin? They need to ban internet first. Hard to imagine.
21 million is ridiculous to me. Bitcoin isn’t the only one, there are thousands. Bitcoin Cash, now two different coins, and all the others show that 21 mill is a fallacy. By creating other coins no inflation is also a fallacy. Every new coin reduces the value of Bitcoin because the money would have been used to buy bitcoin not the coin they bought this diluting the pool. All I have to do is write a “Whitepaper” saying I’m going to save the world from the oppressors and I can create millions out of thin air and they cry about Fiat?!?
Those are just shitcoins which will eventually die anyway. And anyone willing to buy these worthless token will learn the hard way. Shitcoins are no competition to Bitcoin, nor do they share any values. All are just scams.
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