Maybe never, but just dismissing the technology as worse than useless seems a bit irrational. If your position is that the entire crypto space is just delusion, it's probably good to take a step back and consider that you are the one that's missing something.
I am not actually doing any of those things, even though they would all be fair to say.
I am saying that the economic system built around bitcoin is, by definition, negative-sum. And there is nothing about the technology that can change that.
Can you give an example of why an economy using bitcoin would be negative sum? If I'm producing widgets and transacting in crypto, value (widgets) are created, the transaction medium seems irrelevant to me.
I don't actually think switching exclusively to a deflationary currency is a good idea, but I don't buy that it creates a situation where value can only be destroyed..
The only input of wealth is people buying tokens on the market. The only output is people selling tokens on the market. There is a constant drain of this wealth from both market fees and from miners minting new coins and cashing them out.
There is no wealth creation anywhere else in this system. There are only these factors, and they are negative-sum, except for market operators and miners.
If you are producing widgets on the side, that is entirely unrelated to the token market. You can do that with any currency, and it is entirely orthogonal to the tokens. You are not creating wealth within that market, you are creating it outside that market, and possibly transferring it into as a separate step, to be siphoned off by market operators and miners.
Maybe I misunderstood what you meant by "the economic system built around bitcoin", I thought you meant "the economy if bitcoin were adopted would be negative sum".
Now that I understand your point: how is this different from any currency? Currencies are a medium of exchange, by definition they don't have intrinsic value. The value is defined by what you can buy. They are simply a convenient accounting system for value, not the source of value.
How does your argument not apply to every other currency?
Currencies do not exist in a vacuum, like bitcoin, it is an instrument of an entire country's economy. There is wealth created inside that economy, unlike bitcoin.
Right that's exactly my point, you're critiquing bitcoin as an alternative to the "economy" part, but that's not something it has ever claimed to be. It's an alternative for the "currency" part.
What does that mean? That the dollar implements the entirety of the economy? No currency "creates value"
I understand what you mean by saying bitcoin is zero sum, but I'm asking for an explanation of how that's any different (for example how is the dollar NOT zero sum)? I don't think you've explained what, in your opinion, is the differentiating characteristic here.
The dollar does not exist on its own. It is an integral part of the US economy. The two can not be separated. The dollar represents, in some sense, a unit of the US economy.
Bitcoin could theoretically become an integral part of some economy (or a smaller part of every economy). Then by your standards it would no longer have a problem?
It seems like a catch 22 you're presenting. It's a bad currency because nobody uses it, and nobody uses it because it's a bad currency. To me that's kind of a circular argument, and the same argument could be made about any early-stage network (the internet, facebook, etc.)
No, this can not be changed. It doesn't matter how many people use it or not. It very deliberately, by design and implementation, does not represent anything at all. This would not change even if an entire country used it (putting aside that it is not technically capable of doing so).
> This would not change even if an entire country used it (putting aside that it is not technically capable of doing so).
This is the point you need to expand on. When I asked what the difference between bitcoin and the dollar is, you said the defining difference is that the dollar is used by a country. So if that's not the difference what is?
If bitcoin was adopted, would it not also represent a unit of the economy?
Does your argument boil down to "it's not officially backed by country therefor it cannot serve as a medium of exchange"? If so I ask you WHY that prevents it from being a medium of exchange?
I really don't follow the "negative sum" argument. It seems like that applies to every currency, so it's kind of an irrelevant point
It is not that it is USED by a country. It is that it is an INTEGRAL PART of the country's economic policy. The country can, as part of managing its economy, also manage the currency.
Bitcoin is not managed this way. It has rules set in stone it follows entirely on its own, without external input. This means it exists in isolation, unaffected by whatever economic activity takes place around it. This is entirely unlike a national currency.
> The country can, as part of managing its economy, also manage the currency.
You think a requirement for currency is that the country using it can manage it? What about all the non-US countries that use the dollar? They absolutely cannot manage their currency. What about in the past when the US and others were on the gold standard? There are a million counterexamples.
And again, let me reiterate (because it seems we're drifting away from the point here) that we were originally discussing whether bitcoin was "negative sum". I'm telling you that if it has utility (like any other currency) there is value being created.
> This means it exists in isolation, unaffected by whatever economic activity takes place around it.
I don't really know what that means, everything is subject to outside economic forces.
They moved away from the gold standard for some pretty good reasons. And countries don't use other currencies unless they are in a very bad position and have no other choice. Bitcoin is gleefully copying all the bad features of these kinds of systems, and not really any of the benefits.
And I have explained why it is negative sum. It is an exceedingly simple system and easy to analyse. There is no value creation involved at any point. Any value creation happens outside of the bitcoin economy.
There are only three factors:
1. People putting real money into markets.
2. People taking real money out of markets.
3. Exchanges taking a cut of that real money.
Nothing else involves actual value.
The combination of 3 and the fact that miners are allowed to do 2 without transferring any value in means that for the reason of the users, the sum is negative.
