They had support for Bitcoin a few years back, merchants could accept Bitcoin in addition to whatever currency they already supported. The feature was killed because they didn't find Bitcoin useful for transactions (can read more about the why here https://stripe.com/blog/ending-bitcoin-support).
They're most similar to a commodity, like gold, or lumber. There's a supply, a demand, and price. Unlike stocks, there's no underlying asset, you just own the crypto currency and that IS the asset.
Except those other commodities have intrinsic value, while cryptocurrency has no intrinsic value or legal practical applications after nearly a decade. At this point I don't see that changing. They're the tulips of our age, sold from speculator to speculator until the music stops and someone is left holding the bag.
So what? I feel like these objections about "intrinsic value" are missing the point. There are lots of things out there that have little to no intrinsic value (like currency) that are nevertheless very useful. You are acting like there is some inviolable law of the world where things without intrinsic value will inevitably become worthless, but there isn't. There's lots of things with fundamentally no intrinsic value that have nevertheless commanded a very high market price for many centuries now.
I'm not saying Bitcoin is necessarily on that path, but there's also no reason it couldn't be, and whether it is or isn't isn't related to any intrinsic value it might or might not have. And lots of things that do have intrinsic value, like grain, are terrible investments because they're easy to make more of and because they don't store indefinitely. "Intrinsic value" is just an orthogonal concern.
Fiat currency has no intrinsic value itself, but it can be exchanged for things that do. As long as people treat it like it has value, then it does have value.
The same can be sort of be said for crytocurrency. But it's a lot less liquid, mostly the only thing you can do with it is trade it for other cryptocurrencies or sell it. It's on much shakier ground that people will continue to view it as having value.
My advice, for what it's worth, until people find a practical application for it, stay away from it.
Fiat currency emitted by governments has intrinsic value: you can pay taxes to the emitting government with it. That's its ultimate value.
In the same vein, some cryptocurrencies have value: you pay with Ether for distributed computations performed by Ethereum network, you way with Bitcoin for your data being permanently recorded on the Bitcoin chain.
"Intrinsic value" is a phrase that has a specific meaning in economics, and you are not using it according to that definition. The current ability to pay taxes with a currency is not intrinsic value by the standard definition of the term. That currency could drop to worthless tomorrow and would be worth nothing. Go ask holders of Weimar Republic marks how much intrinsic value their currency ended up having. None! The value was hyper-inflated out of existence and the country that accepted it as tax payment no longer even exists! But if that currency had been made out of actual gold, then it would've had intrinsic value, and it would still be valuable today.
Guess what ... your dollars today are not made out of gold. They have no intrinsic value.
Yes, that's one approach. It's a very conservative approach though, to stay far away from new technologies until they're firmly established. There's a lot of money to be made by getting into things when they're still on the bleeding edge though, and the entire startup community exists to take advantage of that fact.
The real question is, is it still early days for Bitcoin, in which case it would make sense to get into it now (albeit still risky)? Or are the early days over and all those gains have already been realized? You'd need a crystal ball to know for sure.
The USD is backed by the US governments ability to pay it's debts, which is a legit financial instrument of value. It's not a 'fiat' currency in the sense being described here.
What? The US dollar absolutely is fiat currency, and anyone saying otherwise is simply using a non-standard alternative definition of "fiat currency" than what everyone else is using. Every economist ever will tell you that of course currency issued by a central bank that isn't backed by precious metals is a fiat currency, and that USD along with all the other major currencies count too.
The USD is a fiat currency that is worth what people (the market) values it at. The ability of the US government to pay it's debts is but one (very important) factor in that distributed calculation. It is not solely determined by that. If it were the value would rise or fall solely on the debt-to-GDP ratio - which is probably only loosely correlated - up to a point where default becomes probable and then it matters an awful lot more, like with Argentina.
"There are lots of things out there that have little to no intrinsic value (like currency)"
??? Most currencies are backed by something. USD's are backed by TBills, Euros are backed by some kind of asset.
"There's lots of things with fundamentally no intrinsic value " like what?
Gold and Diamonds people wear as jewelry, and they have other uses.
Platinum, were it plentiful, means we might have all shifted to fuel cells 2 decades ago.
Gold probably has an inflated price due to it's historical value as 'money' - but outside of that, there's basically nothing that people put significant amounts of money in without some kind of intrinsic value.
> ??? Most currencies are backed by something. USD's are backed by TBills, Euros are backed by some kind of asset.
Oh yeah? And what assets are these exactly? It sounds to me like you're just describing things without intrinsic value that are "backed" by other things without intrinsic value. There is no economist that would tell you that government currencies or bonds have "intrinsic value"; they're just paper. Their value can go entirely to zero (and this has happened many times in the past).
> "There's lots of things with fundamentally no intrinsic value " like what?
Anything collectible has no inherent value. Think baseball cards, art, whatever. They're worth money only because they're rare and people are willing to pay big for them. But the actual intrinsic value of the materials in a rare painting worth hundreds of millions of dollars might be a few bucks at best.
And yes, precious metals do have intrinsic value as defined by economists. Currency doesn't.
"There is no economist that would tell you that government currencies or bonds have "intrinsic value"; they're just paper."
Ok then, I'll trade you any Government Bonds you might have (aka 'paper') for let's say, $100? I mean, worth more than paper, right?
Why do people have such difficulty grasping the abstraction of credit? And that it has value?
The entire system is based on credit - which is more intangible that 'bushels of wheat' or 'shiny rocks' but frankly it's not that hard to grasp.
The bonds are not 'paper' they are a 'promise to provide some value' - and most people take TBills at at least face value because the US Gov tends to honour the contract.
A currency based on a shiny rock has only one, small possible advantage, in that there is essentially a fixed supply of said rocks, and that it cannot be debased, however, this is in most ways not an advantage i.e. it precludes the possibility of any monetary policy.
Ergo we have systems of credit, currency based on that, and a whole bunch of rules around it.
"But the actual intrinsic value of the materials in a rare painting worth hundreds of millions of dollars might be a few bucks at best."
No, when things are configured in a certain way, they have value more than the constituent parts. A 'Tractor' is worth more than the 'Metal' it is made from. 'Art' is something that people like to look at beyond it's constituent bits of paper and dyes.
You seem to be have a very fundamental misunderstanding here that "no intrinsic value" is the same thing as "worthless". You are misusing very basic economics terms. Currencies that aren't literally made out of precious metals are the textbook example used in economics texts to introduce the idea of things that lack intrinsic value.
Lets say you are stuck in a foreign country, you have no money and you are hungry.
You meet a person who barely speaks your language:
a. you whip out a golden coin (intrinsic value) and they will give you food.
b. you whip out a Government Bond (no intrinsic value) and they will look at you like you are stupid because they have no idea what a Government Bond is
No commodity has "intrinsic value". It's worth whatever someone else is willing to pay for it. There's nothing intrinsically valuable about gold, for instance. It's worth what it's worth because people believe it will be worth something in the future and are willing to pay a price for it.
Gold has practical applications. At minimum people are willing to pay considerable sums for it for use in personal adornments. It's also an instrument used as a hedge and traded by speculators, but there's a fundamental underlying value, that is a demand for it apart from speculation. If all the speculation stopped, the price would drop but not to zero.
Other commodities like timber have much more intrinsic value because they are mostly used, not speculated on. If people stopped speculating in the timber market there would be less liquidity but the price wouldn't change much, people still want to build things with it.
Cryptocurrency has no fundamental value, it's a digital good without practical applications and no fundamental demand. if the speculation stopped, the price would go to zero.
>"[for gold] there's a fundamental underlying value"
The fundamental value for it's technical applications is probably < 1/10 of it's real value.
If people wake up tomorrow and stop using it as reserves/ investment /savings, you would loose virtually all your money, down to a few percent. So yeah, that 5% or whatever of value is secure, but how nuch does that help?
Timber is obviously not a usefull store of value because it does not last, it is not fungiable, is expensive to store - imagine 100 million dollars worth of timber, and you would store that.
I think this took a wrong turn. I don't aim to defend gold a store of value. It's not clear what its value would be if people stopped using it as a financial instrument, and I always advise people not to buy gold.
My point was that tangible commodities do have at least some intrinsic value, as opposed to digital commodities like cryptocurrencies.
It's intrinsic value is that it's a digital asset, decentralized throughout the globe, computationally secured by mathematics, that nobody can counterfeit or spend without your key.
Bitcoin does has an intrinsic ability: transacting in bitcoin gives the user power to make secure, irreversible updates on a trust-less distributed ledger.
That ability gives it value for people who need that. For some people and use-cases, that ability is comparable to how gold is valuable for its ascetic and chemical properties.
Isn't that true for any kind of barter? If two parties barter with lumber and gold, the transaction is also irreversible. The ledger is just an implementation detail.
Unlike dollar bills and gold, you can own and move bitcoin without putting it in your pocket. You can walk across the border with it. You don't have to declare it for the crime of carrying more than $10,000 like you do with cash.
You can't store lumber or gold in your head in a brainwallet or in a securely-encrypted digital file. And the lumber or gold ownership relies on a legal authority to recognize and protect the ownership.
From what I gather, the ledger is what makes it possible for bitcoins to be owned. Without a ledger anyone could claim any bitcoin their own. If my understanding is correct, you're basically saying that bitcoins have the ability to be owned, an ability most physical assets already have. Not comparable at all with the actual intrinsic properties of gold.
Anything you can use directly has intrinsic value. Intrinsic value is a negligible part of the total value of gold. But it's a significant part of the total value of e.g. cereal grain, which is historically a common monetary commodity.
Tulips have intrinsic value, so there’s something wrong with your metaphor.
But you are right to realize Bitcoin has no intrinsic value. That makes it very similar to something like a dollar bill.
That said, intrinsic value isn’t really what makes currency valuable. It’s a nice feature... if the bottom drops out of the market and your currency is cigarettes... at least you can smoke them! And trade them for some other currency at the price of smokes.
But that’s a very special circumstance. Intrinsic value only matters under one very special circumstance: Total market collapse. Under normal circumstances, what matters is use value.
And Bitcoin has some very unique use value. For example, it is a thing that can be exchanged for gold that can be stored in your head. That’s a very unique use. I think those kinds of uses, if you can add up their utility, are the best way to calculate Bitcoin’s long term value.
"Tulip mania was a period in the Dutch Golden Age during which contract prices for some bulbs of the recently introduced and fashionable tulip reached extraordinarily high levels and then dramatically collapsed in February 1637. It is generally considered the first recorded speculative bubble in history." - Wikipedia
Yes tulips have intrinsic value, but not the value speculators were paying for them during the Dutch tulip bubble leading up to 1637. Cryptocurrencies are very similar to that.
Money is a social construct. This social construct is valuable. Why? Because this construct solves the problems associated with bartering by allowing us to frictionlessly keep track of who owes what and how much to whom (claims on goods and services). This social construct can use tokens such as dollar bills or gold, for example, as the abstraction for the ledger of record. There are problems using dollars and gold as the abstraction. Dollars (or fiat) violates our common sensibilities as a record on claims on goods and services. The problem is it can be printed without regard and used to extract goods and labor from you (if you choose to accept it). Some people would consider this fundamentally unfair because they are trading their product of their efforts for something that is created infinitely without effort by the privileged few (i.e. something for nothing). Gold is better in this regard but as a money abstraction it is also leaky because it takes up physical space and has transportation and storage inconveniences. Bitcoin is better by having none of these issues which makes it more relatively suitable for the social construct of money (again, it is the social construct of money that is valuable - for which bitcoin happens to be better suited than the current alternatives).
Right. Your's a textbook answer to the textbook question. What are the causes of bank panics? Who are the winners and losers of this inflationary intervention/"reduction" of recessions? If the winners of these policies continue to keep winning, is this good for society at large? You don't seem to see the big picture. Product of one-step thinking. But my contributions to this thread ends here.
The very notion of "intrinsic value" is nonsense. There is no such thing. The "intrinsic value" of a bucket of rice can be enormous if you're starving, and yet it's practically null now. The "intrinsic value" of gold is dependent on one of its extrinsic qualities, rarity (plus another, convention).
Value is just the measure of the willingness of people to give you something in exchange for something else. It's not in the objects themselves, but in the head of the people.
Yes, in that stock can fluctuate wildly in price, and can usually be exchanged for currency. No, in that stock represents ownership into a company, while cryptocurrency represents ... well ... nobody has been able to satisfactorily explain that one to me.
> No, in that stock represents ownership into a company, while cryptocurrency represents
Ownership into a cryptocurrency. Its not like you can borrow a PC from Bill cause you have shares in MS. The company and the cryptocurrency both perform a function that gives them value to people, the stock/coins reflect that value.
Cryptocurrency represents ownership or investment in the proof of work or proof of stake in the network used to validate the transactions in a decentralized and verifiable way.
No. Stocks, roughly speaking, represent entitlements to corporate profits in the form of dividends. Bitcoin doesn’t represent any kind of entitlement. The closest analogy is gold - Bitcoin is a scarce commodity with good currency properties. It’s similar to gold in that it’s fungible, dense, etc. Its worse than gold in that it’s not shiny and something you can feel. It’s better than gold in that it’s orders of magnitude cheaper to store and transport security, and it’s vastly easier to ensure authenticity.
>Chainalysis, a research firm that analyzes activity across different cryptocurrency markets, estimates that between 2.78 and 3.79 million, or between 17 and 23 percent of all bitcoins have been lost.
Has anyone written about how it would affect energy markets if Bitcoin reached the flippening price? If the price did hit $500k, as of the most recent halving it would be profitable to keep spinning up miners until aggregate mining costs reached $72 million. Even assuming 80% of marginal mining costs is energy, that's a lot of additional demand on energy markets.
That's assuming that the mining hardware doesn't get more power efficient (obviously, that ALSO means miners are profitable at higher hashrates, so more total miners).
I think there may be a future where energy is no longer the deciding factor in profitability vs the hardware itself and operational costs (land, employees etc). Which could mean less power consumption despite climbing hashrate.
> That's assuming that the mining hardware doesn't get more power efficient
The efficiency of the mining equipment doesn't really matter.
It is always worth spending almost as much money on electricity as the cryptocurrency generated. If someone comes up with a more efficient miner, it is profitable for them to roll those out until the power equation levels out again.
Mining equipment efficiency affects the total network hashrate, but not the overall power consumption.
> That's assuming that the mining hardware doesn't get more power efficient
If mining gets more power efficient, holding everything else the same, the difficulty will go up until the efficiency improvement is negated. Bitcoin is designed such that efficiency improvements are eaten up; otherwise every time there was en efficiency improvement it would become cheaper to attack the network.
> I think there may be a future where energy is no longer the deciding factor in profitability vs the hardware itself and operational costs (land, employees etc).
What would the catalyst be? If anything I see this going in the opposite directions: the more money at stake in mining, the more it makes sense to make big, efficiency-improving investments that take upfront capital but are amortized over time.
The one exception to this would be if there were a truly breakthrough improvement in hashing technology that was captured by a single miner, in which case that miner could essentially force everyone out of the market by pushing the difficulty above everyone else's break-even point.
Stripe actually did invest in Stellar [1], so they seem to be interested in cryptocurrencies. This blog post is from 2014, though. It would still be interesting to hear their up to date opinion.
Hm. So in essence, you would instantly buy crypto through Stripe, and then they would instantly sell it to someone else? Kind of like a middleman or exchange service?
It's so strange to me that people don't see how that is antithetical to the concept of cryptocurrencies.
The right way to do cryptocurrencies is to just let people use cryptocurrencies. But that means watching your business get eaten up by it. Which is why they are trying to insert themselves so that they don't get disrupted out of existence.
Smart business like to consolidate their dependencies. If the fee is on the order of 1-2% then the reduced overhead of "where's my money" may be worth it to many small businesses.
There's a lot of supporting structure to nail a point of sale transaction for both sides. It isn't reasonable to expect every business to run bitcoind, handle cold wallet vs hot wallet, and integrate it with their ecommerce system.
Companies want a simple solution that lets them accept the various common ways people want to pay whether that's Paypal balance, any of the credit/debit cards, or any of the other services out there.
I would disagree, especially for PayPal and Stripe. They are large players but the payments industry is very diverse and there are no shortage of providers. If you want do want to talk about dominant payment processors, I would look first at SWIFT, Visa, Unionpay, and MasterCard.
I see this behaviour every day. There is even a Neapolitan expression for this: "chiagni e fotti" [1], which could be translated as "cry and screw (others)".
> I recently analyzed the trading activity of Senators [0]
How is this relevant? Surely any senator knowingly engaging in insider trading wouldn't do so directly. They would get someone else to profit from the info and give back to them in either untraceable or legit ways.
Insider trading By elected officials isn’t against the law. There’s no reason for them to hide it. There have been several recent examples of senators openly insider training and no repercussions for being caught.
The book is so well known in many countries as it's part of the standard curriculum (I had to read it when I was 16), so I think the German film makers felt it needed no particular references to the story. It's right next to Animal Farm, Brave New World, and 1984.
I thought everybody knew that the book the movie was based on was based on the story in the OP. We had to read the book in school (in Europe). I feel old now.
Interesting how the top comments are about Microsoft products discontinued years ago.
Nowadays google's the one shutting down products people love (reader, inbox...).
Looks like an inevitable phase in the unicorn lifecycle.
It is an awful lot of Microsoft stuff, now that you mention it. Kind of surprising on hacker news, but then I guess the open source stuff can't ever be called discontinued.
https://www.youtube.com/watch?v=NN75im_us4k