65 Comments

Appreciate the alternative view of bitcoin provided by Anton. He is correct that "bitcoin is just a bunch of numbers in a computer." He doesn't find value in it. But that is the way computers work, through code and numbers, and they have changed our society in the past 44 years. Gold bugs seem to only find value in something they can see, hold, and touch, even though most folk don't hold physical gold but hold it in electronic form. Just a bunch of numbers in a computer.

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May 20·edited May 20

Tell me you've not spent any time studying Bitcoin without telling me. Sounds like a boomer with no technical/IT/coding experience at all. I can't blame people for not reading code or being technical, but this level of ignorance combined with certainty is tiring.

Reminds me of Paul Krugman poo-pooing the internet back in the day.

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May 20Liked by Quoth the Raven

Same old arguments. Nothing compelling. Allocate to one’s affinity. Abstraction of real assets has been happening for ages. It’s for an internet age and beyond. I’m almost 70, so there’s no youthful exuberance here.Saw a recent use case instead of Swift for a business to save time and money.

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Still waiting for a good argument against bitcoin that's not just harrumphing about tulips and intrinsic value

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Keep waiting. The only bit worth any attention was the Carlin video.

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May 20Liked by Quoth the Raven

Loved the interview by the way.

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Anton is almost right. Cryptocurrencies are only blank checks used as tokens to transfer value but permit the digital transfer of security information making the transfer reliable in seconds rather than requiring 2day checks to make sure nothing fraudulent has occurred. It is the use of cryptocurrency that regenerates it for the next user as it pick up a new identification on each transfer. Without use, cryptocurrencies have no value. It is the users who give value to these tokens.

The big question is "If value is dependent on trillions of transactions be many users, should not the users be credited with the value they impart?" Without use, 'Bitcoins' have no relationship to anything and until they are used we have no clue as to how the value is distributed among users as in 'if not used, these have little value as a rewritable blank check if not used'. Thus far, they have yet to be used!!

The market has no clue what th value is for these and they can be created at will. An untold number of cryptocurrencies can be created as Wikipedia lists more than 20,000 pre-2023. https://en.wikipedia.org/wiki/List_of_cryptocurrencies

That Bitcoin should be worth $60,000+ in a pool of imitators seems out of touch of the reality of investment alternatives competition.

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Bitcoin, not crypto. I get it that non-technical people don't understand the difference as the cryptobro scammers with their VC money figured out how to market new ponzi schemes and dupe people who don't know better and are desperate for quick profit.

Most people don't understand base layer protocols (TCP/IP, HTTP, SMTP) but use them every day for EVERYTHING. Bitcoin network is literally a base layer protocol, which is different from the 99.99% of the shitcoin projects out there to scam people. A product of cheap money in a ZIRP environment in a fiat system that is making people desperate.

Do the work. Study the white-paper, the code, and at least a few books and podcasts dedicated to the subject.

"If you don't get it, I don't have to time to explain it to you." -Satoshi Nakamoto

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If it is not used, it has no value. It does not matter if it is unique, it matters in how the value is created, who creates it and how the value accrues to those involved. Bitcoin requires use and it is the users who provide the value proposition not the creator. Users have not materialized. JPMorgan created its own crypto-currency, tested it and shut this test down. Thus far the use case has not materialized even after 10yrs. Hmmm.

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May 20·edited May 20

Network effects are important for a reason. I'm sure Paul Krugman also thought no one was using the Internet when he made his infamous prediction.

10 years? You do realize it's been 15 years, right? Are we talking about the same thing?

It's obvious that you have your position and have no desire to understand why other people are proclaiming the contrary. It's easy to be in your bubble of "no one uses it" because YOU wouldn't use it, so clearly other people must not be, and you're not going to spend time figuring out if maybe you're wrong.

Millions of people in poor nations are using it daily, using layer 2 network solutions to pay instantaneously (ala the Lightning Network). I use it frequently to buy products, not to mention being able to stream micro-payments to podcasters and content creators, something you can't do with tradfi payment rails and providers.

The world is much larger than the G7 nations who have financial privilege and USD hegemony.

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I stand corrected, people on the fringes of the banking system do use it. But, i is not being used commercially by major corporations in the wider sphere of commerce as has been promised. Why not? If it was that cost effective, secure and transparent, every corporation would have jumped on it long ago. They have the skill sets to evaluate and the global operations to effectively deploy. Financial privilege stopping its use?

Now you're speaking religion/philosophy when business is all about profit/loss. It is pretty basic. Corporations are not using it. They have played with it, but nothing serious has evolved as it should have by now. There is a fundamental lack of trust. Bitcoin is not a value asset as people have attempted to label it. Neither is gold for that matter. Gold retains it value because it is used in global currency transfer. The demand for commercial use is limited. Bitcoin is a token of value transfer not an asset in itself and serious businesses have yet to embrace it.

The basic premise behind any currency is the culture of the population behind it. That is why the US$ has come to occupy the position it has. Hegemony has nothing to do with it.

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Have you ever worked in Technology at a large institution/company? Do you think that new technologies, much less paradigms, are adopted overnight?

If we have been doing things virtually the same way for 50+ years, why would we expect it to change so quickly? I've worked in IT at banks and health insurance companies, I know how much is held together by very old tech sometimes bc it's consistent and simpler, sometimes bc it's too risky to change, sometimes bc current leadership is just stubborn, ignorant or both.

Many small businesses around the world, and US, are beginning to adopt it. Other larger corps are too (Metaplanet out of Japan, K&C Cattle out of Texas, etc), from a corporate Treasury standpoint.

And all this doesn't even touch on how the mining side of it is solving power grid infrastructure issues, especially in poor, remote areas with stranded energy.

Bitcoin monetary protocol/network is ground up adoption, just like early Internet. Following same technology adoption curve pattern. We are only 15 years in. Very early.

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When there is value to be had, adoption occurs overnight. Apple had 3yrs in a row of 45% revenue gains on the 2007 iPhone intro. That was in the worst recession since 1929.

The 'Bitcoin Revolution' has yet to begin!

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Who makes money from the base layer protocols used for the Internet?

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The speed of transfer -- instant as opposed to a couple of days -- can be an asset, but in some cases it can be a liability/risk also. If it's something that won't be needed for transactions often -- a long-term storage of value -- than the fact that it's "slow" doesn't matter much or at all. Rather, the lack of dependence on a computer network of any kind could be a form of risk-mitigation.

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The speed of settlement is deemed a cost savings of not needing the level of compliance staffing. Even gold needed to be assayed to make sure its value transferred was legit and they saved this cost by keeping it in NYFed vaults but still needed to pay custody fees.

Relating cryptocurrencies to the Tulip Bubble is spot on. Michael Saylor's claiming Bitcoin is an asset is an otherworldly claim in my opinion. An asset that can be imitated by substitute products endlessly that accomplish the same thing lowers the useful value towards zero. Saylor seems strangely out of touch as if he is living in a dreamworld.

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Only on the surface does crypto look like a homogeneous group of competing technologies.

The reality is network effects and the fundamental tradeoffs the imitators make to push a value proposition/differentiate themselves mean they’re more similar to each other than they are to BTC.

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I was waiting for tulips to come up; it often does when bitcoin critics seem annoyed at the amazing increase in bitcoin value from inception in 2009 to the present - 15 years. Tulip mania lasted three years, peaked, never came back, unless you think it came back in the form of bitcoin with no end in sight.

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May 21·edited May 21Liked by Quoth the Raven

Completely agree with Anton, reading the other comments it's clear you are now popular with the Bitcoin Schills Chris.

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Thanks for sharing Chris. Anton sounds like a very smart guy with experience and thus wisdom.

But it’s clear he doesn’t really understand BTC outside of a typical financial/Wall St viewpoint.

The talking points about 20,000+ imitators, no inherent value because it’s just a bunch of numbers, and the decimal point issue with satoshis are disappointing to read.

First and foremost satoshis don’t even exist. When you spend a UTXO it destroys the input and creates a brand new output. Satoshis are just a convenient way for us to denominate and size UTXOs.

Furthermore, regarding numbers in a computer system, while that’s technically an accurate description of the network, it’s the *way* it’s designed, distributed, implemented that gives it value. A network that allows you to move value around the world with 10 minute settlement times and no third parties clearly offers value to society.

Dollars are largely digital and (in my view) sustain value by virtue of being the denominating unit of the largest and deepest credit pool in the world. That is, the dollar has value secured by future claims of dollars (debt repayment).

In an abstract way, the block space or rather the ability to send messages on the network *is* the asset, denominated in BTC.

Would be curious to hear what other QTR readers think about the above.

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What's BTC going to be worth if they come up with something better?

BTC has been around how long and what percentage of people understand how it works?

Do you think BTC will stabilize to the dollar or gold or anything of value so it can be a currency rather than a speculative investment? When?

I hear how it's going to the moon. How will that make it a good currency?

How many people over the age of 80 would have the where-with-all to understand and use BTC as a currency?

Can you use BTC when the internet is down due to a cyberattack? An EMP?

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Planes have been around for how long and how many people understand how planes fly before jumping on one?

The Federal Reserve has been around for how long and how many people know it's an experiment in central planning that has failed twice before in America?

How long will it take discover that you can't solve the Byzantine General's problem twice? Or make a rounder wheel? A new type of oxygen? water? etc etc

BTC doesn't need to stabillize against anything else. It exists to end the state monopoly on money and exists outside of fiat. As Jeff Booth points out, can't fix a broken system from within that same system. The fiat system of theft works because we continue to give it our energy. Bitcoin is a voluntary opt out decision for those who choose to give their abstracted time and energy to a superior system vs the one we are born into.

People over 80 can stay on fiat. It's not going away tomorrow or in a decade but as the saying goes, progress happens one funeral at a time. The future is not theirs. It belongs to our kids and they aren't going to want their grandparents technology.

How long will people use paper dollars instead of bartering for real things? Can't eat green paper notes. I live and plan for a better tomorrow, not an apocalyptic world described in The Road.

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Well said, sir. Cheers.

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People over 10 can stay on fiat too. What is the big problem that crypto supposedly solves? When I go to the coffee shop, I hand over a $5 bill and the transaction is instant and anonymous.

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Good questions, happy to engage.

1) depends what you mean by better - could you be more specific?

2) 15 years and some change, as of today. Honestly unsure, it’s hard to say with any precision what worldwide adoption is like. I’d turn around and ask you, how many people understand how the dollar system works? Lack understanding doesn’t preclude people from using the dollar or using computers, any technology, etc.

3) I’m sure eventually it will stabilize but I don’t care if it stabilizes against the dollar. The better question is if the dollar will ever stabilize against BTC or gold, other sounder monies. I don’t like to make predictions on timing because truthfully no one knows. But dismissing it as an asset based on arbitrary timing cutoffs would be disingenuous.

4) I’d ask similar to point #1, what makes a currency good? Is the dollar good because 1 dollar = 1 dollar over time even if the purchasing power is severely diminished?

5) again, lacking understanding doesn’t preclude usage. How many people over 80+ understand fundamentally how a computer works, how the Eurodollar system works, etc.

6) I’ve read that transactions have been sent and synced via radio and satellites. So, theoretically yes, but obviously much more difficult. We would have significantly larger problems if there were widespread outages, though.

Genuine question, with precious metals, how does transacting work if you don’t trust your counterparty and testing metal purity isn’t easy at the peer to peer level?

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1. How do you know something better is going to come along? What is gold going to be worth if a massive new mine gets discovered, or if they start mining it on asteroids?

2. The white paper is available for free to everyone. How many people know how fiat steals half of your wealth and inflates away the rest? By the by, the fact that there are still people out there that are naive about Bitcoin is bullish, not bearish.

3. Appreciate the attempt to poison the well there by implying Bitcoin has no value and gold and the dollar (LOL) do. The dollar has lost almost all of its value since the Federal Reserve came into being.

4. A deflationary asset that pays you for not spending it - you don't think that would make a good currency? Compared to the US dollar which is constantly losing value, which encourages consumption in the short term and discourages saving and deferral of gratification. I think it's clear how that is working out for society.

5. Don't know. Bitcoin is starting to show up in more pensions and retirement funds, which is good. I think the 80+ would benefit from learning about it, just as they did with credit cards and online bank accounts.

6. You can use BTC if the internet is down. You can use phones, radio, and even paper transactions. Is that great or efficient? Of course not, but since this is a literal doomsday scenario, no perfect solution would exist. By the way, this would have to a global EMP, since the Bitcoin network is decentralized and found in many countries. The people running the trillion dollar network would have a massive incentive to restore said network as quickly as possible as well.

I guess my question is why aren't you looking up the answers to these very basic questions instead of thinking about these 1 in a million scenarios?

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Anton underestimates the value of the network aspect, the power of decentralization, and the effect of scarcity thru a fixed supply. Bitcoin is the most powerful computing network on the planet in a digital age….the idea that is worthless is what clinical psychologists would call denial.

https://bagholder.substack.com/p/the-power-of-decentralization

And

https://bagholder.substack.com/p/monopoly

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So what's the accurate value of a network? How does one calculate it? What's the value of the check-clearing network? What does it cost to build?

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The value of a network is directly proportional to the goods & services that travel on those rails. Rockefeller's network gave him a percentage of the Oil market, Amazon gets a percentage of all the retail products on their rails. When you consider "Money" is half of every transaction on the planet - the upside on a BTC network will dwarf Standard Oil & Amazon - even if it doesn't become the coin of the realm .... Its not the check-clearing network which matters as it is very small in dollar terms, its the store of value (monetary properties) which is 100's of trillions that BTC will take over..... As for the cost to build, well, centralized networks are cheap and easy - its the decentralized part that is hard (and thus both rare and valuable). What separates BTC from the rest is there are NO other fully decentralized crypto networks (even though some of them will claim it) on the horizon - and even if one came along, they are 15 years behind the BTC network monopoly.

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John Paulson called it a limited supply of nothing.

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Digital scarcity. Tough concept for most to grasp, but after 15 years and $68K/Bitcoin, I think it's starting to sink in.

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Paulson was 50% right. I call it an unlimited supply of nothing. There is no limit to how many cryptos can be created, and there is no limit to how many smaller units of Bitcoin 1 can be created, whether Satoshis or otherwise.

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The pizza slices argument 🤨.Now that’s a good one🤨. Just can’t even address how little sense that makes. Sure, a lot of crypto can be created.So can a lot of companies, art,music,films or WHATEVER. That’s pretty weak too. Because we all KNOW ( or should) that they aren’t the all the same. Some things are WAY better than any other for good reason. If one understands it, one can appreciate it. Not everyone can.

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True

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A lot of very smart people, including Saylor, believe in Bitcoin.

Some will point to their bias as an investor to be behind their feigned confidence, but there's something more going on.

It smells a lot like religion, where a new sect pops up criticizing the dogma of the old, only to get it all wrong and mislead.

And there's always knowledgeable, intelligent people at the helm.

Bitcoin is a terrible joke being played on the arrogance of others seeking prestige from its followers.

When it implodes, recognize that you were played and the dangers of following.

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Anton only scratched the surface on the weakness of Saylors infomercial with qtr.

Chris asked about the stock sales, the response is a ten year option would expire worthless if he didnt sell the stock? Baloney, options only expire worthless if the strike price exceeds the actual price. Saylor could have sold just enough to cover tax liability or if he was a true believer he could have written a check to cover the taxes and stayed maximum long microstrategy. I couldnt believe he actually told Chris the option would expire worthless if he didnt sell the stock

Saylor is yet again just talking his book. He is hawking btc to the greater fools while selling microstrategy hand over fist. This will be the greatest rugpull ever

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A couple of things about the Sailor interview annoyed me.

The bitchy schoolgirl response to a challenge to debate Peter Schiff. That he will only debate anyone who has put a billion dollars into gold or anything else. Like he has put a billion of his own money in Bitcoin! He's spent debt and shareholder funds. And it's a stupid notion from an otherwise intelligent guy. It would be like Tiger Woods saying he will only debate Augusta or accept coaching about golf with someone who has won the Masters five times.

Then, he could just acknowledge that he's sold shares to get cash, cause there's no way he's going all in on Bitcoin. That's truthful and honest. Instead we hear some BS about options expiry and he was forced to do it. He could have converted all the options to stock and not sold a thing. Its snaky the answer he gave.

Regarding Bitcoin, what do I lose out on lifestyle wise by not having bitcoin and bitcoin going to a gazillion dollars? Someone here in Australia won $150 million in lotto a few nights ago. Does it affect me at all? He could win lotto every week for the next ten years, and it doesn't affect me or my lifestyle at all. And lets say the gazillion dollar bitcoin now becomes the worlds reserve currency, for everything. Am I really not going to be able to buy food, electricity, petrol etc. because I didn't buy at $60,000? Are billions of humans not going to fed,sheltered or clothed cause they didn't buy bitcoin now? Billions will muddle through. The bread will cost roughly the same amount of labour to purchase as it does now. Same for everything. One way or another, we will trade equal values as buyer and seller. It's the way of free markets. Mine and billions of others lifestyles will not be meaningfully destroyed by not having bitcoin now, in preparation for the change to bitcoin as money.

So we miss out on a few Ferrari purchases? So what, it makes no difference to my lifestyle.

All that to say, I still struggle to understand why I should buy bitcoin. Given the reasons brought up in the article above and by the likes pf Peter Schiff.

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Great description of the response to a Schiff debate, i had forgotten that one. Saylors response tried desperately to hide lack of substance with complete bs

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Mr. Wahlman states, "[o]ne of the better analogies I can think of, is that the market is assigning a gazillion-dollar value to your checkbook -- without any attachment to the bank account that’s behind the checkbook.

I mean, this is simply absurd."

Absurd? Really? What value does a dollar bill have? It's just a piece of paper. Who would trade 100 copper pennies for a piece of paper? Someone will opine "This note is legal tender for all debts public and private." O.k., there is a promise by the United States behind the piece of paper. How is that different from Bitcoin? History is full of such promises by governments that came to naught. Right now Bitcoin stands on the same promise, albeit not back by a government but by individuals.

What Mr. Wahlman appears not to understand, at least he never states it, is that all money is a religious experience, in other words, the value of money is based on faith. Nothing more. If people no longer trust the money issued by their government, that money becomes worthless. If the individuals holding Bitcoin believe it is worthless, it will become worthless, not to the extent of 99%, as Mr. Wahlman asserts, but to 100%.

And the same could be said for gold and silver. In fact, with gold and silver the problem of value is more intrinsic than with Bitcoin. If the economic situation deteriorated to the point where gold and silver were needed to purchase a product (assuming any products were available), who would you trade it with? Are you going to give a gold bar, or a gold coin, for a can of green beans? Are you going to slice off a flake or two from your gold bar and call it even?

As I understand Mr. Wahlman, the heart of the matter is consensus. As of today, everyone has faith, although diminishing, in the value of their dollar. Not everyone has faith in Bitcoin. But if more and more people come to believe that Bitcoin truly is a store of value, then Bitcoin will retain its value, for all the reasons that Saylor says and more.

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I'm no fan of fiat, but it can be used, in today's world, to discharge a debt, including tax debt.

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> From my vantage point, someone created a long series of numbers in a computer, and because this computing power has been distributed to many computers globally, it is possible to keep track of each of these numbers so that nobody can “steal” your specific number-series. This sounds lovely an intellectual exercise, and it could have a nominal value if each number-series had some real asset value to it.

The same argument applies to green pieces of paper. Or for that matter those shiny yellow rocks.

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Anton is right. Bitcoin is nothing. How many times has the story(sales pitch) changed? I’m gonna have fun not going broke when Bitcoin goes to zero. It is another in a long line of bubbles created since going off the gold standard. Best of luck to all the speculators.

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