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Issue #879: Nocoiner salt on the rise

Issue #879: Nocoiner salt on the rise

Dec 2, 2020
Marty's Ƀent

Issue #879: Nocoiner salt on the rise

Do you hear that, freaks? That's the sound of a steadily growing chorus of screeching coming from nocoiners who were certain that Bitcoin had met its demise after the 2017 bull run. Prepare yourselves. These creatures are about to crawl out of their holes with their noses held high in the air as they lecture you about how stupid you are for being a Bitcoiner. They will trot out the same old tired talking points that have been debunked time and time again over the years. Matt O'Brien, a mediocre blogger, is a perfect example of this particular archetype

Before the screeching gets too loud, your Uncle Marty figured it's a better day than ever to deconstruct Matt's thread and explain why each point he makes is plain wrong for those of you freaks who may be new to the Bitcoin world and the dirty corner of the Internet this rag resides in.

"Bitcoiners are taking a victory lap because its price is back to where it was three years ago. This supposedly proves that it's a better store of value than other assets that don't regularly experience extreme volatility."

Yes, there may be some bitcoiners taking victory laps. I will concede that. However, while the price rising does help the case for bitcoin as a store of value over the long-run, it is not the only factor that makes bitcoin a better store of value when compared to other assets. Bitcoin's hard cap, it's distributed nature, it's divisibility, and it's salability over space and time make it the best store of value the world has ever seen. The price is rising because many people are beginning to wake up to this fact.

"It's worth pointing out, though, that the original pro-bitcoin arguments people were making years ago—either that it was a superior payment system, or that it would actually replace fiat currencies—haven't and won't come true."

Well Matt, a lot has happened since the last time the Bitcoin price briefly touched these levels in 2017. One major thing that happened between December 2017 and today was the launch of the Lighting Network. A peer-to-peer second layer built on top of the Bitcoin protocol that allows individuals to send and receive sats (satoshis, the smallest denomination of a bitcoin for those unaware) instantly and cheaply, As I type, there are people paying for goods over the Lightning Network, streaming sats by the minute to podcasters on Sphinx, and using the Lightning Network to send text messages to each other. (That last one isn't really a payment application but a cherry on top of the payments.)

In regards to replacing fiat currencies, Bitcoin is slowly but surely climbing the list of global base monies. It recently surpassed the Russian ruble to find itself at #11 in the world (gold and silver included).

"If bitcoin really was going to change the world, it'd be in the middle of exponential growth right now. Instead, the number of transactions it's used for each day hasn't increased in the last three years."

Yes, the number of overall transactions fell after the 2017 run and is just recovering to that level. On the surface that may seem like a good counterargument to those who believe Bitcoin is succeeding. However, this is a weak argument because it discounts the fact that many exchanges, the entities responsible for the most transactions on the network, have improved their operations, wised up, and started batching transactions. So, even though the number of transactions is about where it was in 2017, it's safe to say that, on average, each transaction represents more payments than the transactions that were being facilitated in 2017. On top of that, a number of individuals have begun transacting on the Lightning Network, which reduces the amount of onchain transactions.

The real metric Matt should be tracking the Value Transacted Per Second (VTPS), which is currently hovering around $500,000.

"It makes sense: bitcoin is a slow, and not very cheap payments system. Not to mention the bigger point: everyone who buys bitcoins believes in them so much that they never want to spend them. It's an investment for them, not money."

Contrary to popular belief, Bitcoin is not slow and is extremely cheap when compared to alternatives. Onchain Bitcoin transactions are most comparable to moving gold and dollars via the international wiring system. Onchain bitcoin transaction settle much faster and at a much lower cost, typically, than its competitors. It takes weeks to move gold from one place to another and that process is considerably expensive. Wire transfers take days to weeks and come with fees as well. Bitcoin transactions can reach final settlement within an hour (if 6 confirmations is your threshold for final settlement) and fees to get a transaction included in the next block are currently at $2.74. If you are moving millions of dollars worth of bitcoin, that is extremely fast and cheap when benchmarked against gold and wire transfers.

"Bitcoin's only actual use is as an investment for tech bros who don't understand monetary policy, and, as a result, incorrectly believe that the dollar is about to collapse. It's digital gold, only if gold were more volatile & easily manipulated."

Bitcoin has a number of use cases beyond an investment for tech bros! And those tech bros tend to understand monetary policy much better than mediocre bloggers and the central bankers who seem to be throwing shit at the walls to see what sticks. People use Bitcoin for remittances, for commerce, for messaging in a private fashion, and a bunch of other reasons every hour of every day. Yes, gold may be a bit less volatile than bitcoin at the moment, but it is certainly manipulated to a much higher degree as is evidenced by the London gold fixing and JP Morgan's spoofing scandals.

"What's another way of describing digital gold? Well, I think this holds up: a Ponzi scheme for redistributing wealth from one libertarian to another."

Bitcoin is not a Ponzi scheme. A Ponzi scheme needs to have a centralized coordinator and Bitcoin is a distributed peer-to-peer digital cash system controlled by no one. Bitcoin's increasing value also raises all boats. Some Libertarians, and others with other political affiliations, are getting handsomely rich together.

Have fun on the sidelines, Matt! I'll pray that you come to your senses and join us in our peaceful revolution.

Final thought...

The toddler is starting to stand and is attempting to climb steps. I want another.


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