Currency and bitcoin

Bitcoin seller: would you like to buy bitcoin? It’s been increasing in value
Me: Value? A currency has value because people, foolishly or forcibly, choose to put faith and credit to the currency, to the party that puts their name to that currency.
That party have been sovereigns, monarch and kings, then modern government. 
The value of bit coin depends on the faith and credit people have in it, and since there’s no sovereign behind bitcoin, this faith and credit depend on your ability to sell it.
Bitcoin seller: it’s fact that bitcoin been growing really fast in value
Me: Since you already own bitcoin, it’s not a surprise that you, and everybody else that already owns bitcoin, tell everyone else how great that story is. There’s nothing new to group of people puffing up the value of security or object with the hopes of fooling people to get real currency. It’s kinda funny how you yourself evaluate the value of bitcoin towards the US$, not bitcoin itself, it really shows what’s up.
Bitcoin seller: i have a billion Zimbabwe dollar, to remind me what happens if government screws up with our money.
Me: government, you’re comparing Zimbabwe dollar to what? US Dollar? Euro? Monopoly dollar? Are you seriously saying because the government of Zimbabwe lost the faith and credit of everyone else then the US, the G-20 countries will to?
Bitcoin seller: but government do fail and default on their debt, government can mess up.
Me: indeed government can and did fail, and it doesn’t take government to mess up their own currency, read about what George Soros did to the pound. Soros proves that money is just like silver or grain, you can corner the market for a currency if you have the ammunition.
So currency can fail for all kinds of reason, but you speak about authorities, so now I ask what happens if the bitcoin “authorities” screw up?
Bitcoin seller: that’s the beauty of bitcoin, it cannot screw up, because the ledger is distributed everywhere. Unlike centralized ledger, where you only need to breach the centralize ledger to compromise the transaction.
Me: well, that sounds like with bitcoin, a perpetrator has access to a lot of breach point instead of one.
Bitcoin seller: but since all the parties have a ledger, any mistakes would be immediately spotted
Me: well, what if many parties disagree with the transaction? It cannot happen? Well, all it takes is some “credible” parties to have another “credible” parties agree that indeed, their transaction ledger is different than the rest of the bitcoin ledger base. What’s next when that happens? Who will resolve it since there’s no central authority? Are you going to tell me that well, there’s actually an authority on bitcoin
Bitcoin Seller: the logic behind the record keeping and algorithms is robust. Satoshi Nakamoto has set the foundation of bitcoin principles in 2008
Me: you’re willing to rely on an non existent person? We still don’t even know who Satoshi is, or even if that is person. For all we know, Satoshi Nakamoto could be a working group in some government agency tasked with undermining other country’s currencies. 
This Satoshi is an awesome person when it comes to cryptography and yet nobody know who that person is? I find that unbelievable, a person with enough cryptography skill to set a global-IP-based multi-ledge transaction recording system updated in parallel and real time would be top employee in a top company.
Who has the best cryptography talent base? Who has the most interest in paying top dollar top the best cryptography minds? 
As to the algorithm, these questions that bitcoin miners has to solve, who created them? Who set the algorithm that enable miner to obtain bitcoin when in the process of managing bitcoin transaction, miners solve the question, and thus earn bitcoin?
Bitcoin seller: it sound like you think the government created bitcoin, but that’s impossible, in Jan 2014, Charlie Shrem the CEO of BitInstant was arrested for enabling bitcoin for money laundering.
Me: so the idea that the government would encourage people to do and grow a concept, only to punish people that have expanded and grow that concept, cannot be true? You don’t believe that the government is capable of cruel entrapment? You think the government has morality? No, the government has bureaucrats.
Do you know Benjamin Lawsky? The bureaucrat who created regulation on bitcoin, the bitlicense?
He created the application when he was working as a bureaucrat, the license was such that a lot of people complain that they cannot me the application.
He then quit his job as regulator, opened a consulting company that help companies to navigate the BitLicense application process, the process that he created.
How’s that for potential conflict of interest? 
Someone is saying I’m here to protect the customer, so I will create a fence and a gate for people to come in. Then he went outside the gate and charge people to get in.
There’s commercial tactic that’s called selling a solution by creating the problem. 
Who would’ve thought that these bureaucrat in western and corruption free countries would have such strong commercial sense.
These are the people that makes the government policy. 
Bitcoin seller: Hey, even the federal government sold bitcoin
Me: you’re confusing me. The federal government auction bitcoin that they confiscated when they shut down silk road. It doesn’t mean that they like bitcoin or want to continue using it or to endorse it. 
It just mean that they have something that other people say have value, and they want to see if there’s anyone stupid enough to actually give greenbacks for bitcoin to the federal government. 
The federal government could have auction those bitcoin, receive the greenbacks, then declare bitcoin banned the next day. 
Could they do that? Declare bitcoin worthless right after receiving money for bitcoin? Why not? Who tell the federal government what not to do? The uncentralized entity of bitcoin?
Bitcoin seller: hey, still as an investment, people say that what china bans, we invest. Look at google, look at facebook, China bans them. China bans bitcoin, so we should invest in bitcoin.
Me: there are several things in your statement, I will unpack them.
First, it sounds like lazy thinking, just because x, then y, sounds a lot like lazy thinking, and you should see why as I progressed.
Second, it sounds chauvinistic. Are you implying that if China does something, then it must be wrong or suboptimal? Have you entertained the possibility that China could be taking the most optimum point and the rest of the world are wrong? Whoa. Cannot happen?
Third, China government is very capable, just look at their economic growth data. China is not the only country with 1.x billion people ready to work, yet their growth had far outpaced global growth. So the data shows, when it comes to economics, China has been very good at beating every other country in achieving growth.
Forth, China bans Google and Facebook because they understand it’s potential and want to build their own version of Google and Facebook. Ever heard of Baidu, RenRen, Tencent, Alibaba? Have you check their revenue?
Five, does China bans bitcoin or all cryptocurrency? I think it’s all cryptocurrency. 
Why? Because as I said, sovereigns can create currency, why would China, a sovereign, allow another entity, in any form, the power to create currency? 
If I am China, I would prefer to enable the digitization of my currency, rather than giving space to someone else’s idea of a digital currency.
Bitcoin seller: well, bitcoin enables us to be free, to get out from the tyranny of government issued cash.
Me: well, why do I want to do that? First, I am not interested in things that can only be bought with untraceable currency, second, I am no interested in having freedom that nobody acknowledges as exist.
I touch on the validity of bitcoin, how about mt.gox? People lost their bitcoin storing it with mt.gox, and since this is a digital currency, i can only keep it online in the digital world, there’s no guarantee that my repository wouldn’t end up like mt.gox.
Bitcoin seller: mt.gox was an isolated incident and people keep using bitcoin afterwards.
Me: well, did they resolve how it happen? They cannot even know that and they still don’t know who steal all those bitcoin. And since they don’t know how it happen, how can anyone develop a fix? There’s no fix.
And doesn’t that mean that the very strength of bitcoin, the ability to be totally anonymous, is also it’s biggest weakness? If someone took my bitcoin or disagree on the provenance of my bitcoin, there’s no way I could retrieve my bitcoin back?
And off course people that already have bitcoin kept using bitcoin after mt.gox, what are they going to do? Just let the hype died down, admit that bitcoin is vulnerable and there’s no fix? How does that benefit people that already have bitcoin? What’s more beneficial to people that already own bitcoin, admit that their bitcoin are worthless or collectively keep piping up the hype to bitcoin?
Bitcoin seller: you make it sound like a big ponzi scheme that relies on people having bitcoin, at which point they then would have an interest to get other people to join to further increase the value of bitcoin.
Me: that’s because it is.
Bitcoin seller: are you saying i’ve been had? That i’ve bought useless stuff and now I am peddling it back?
Me: well, that’s tough, either I have to think that either you are smart and evil or you are dumb and kind. 
Bitcoin seller: but at least my bitcoin has value.
Me: well, that’s another strength of bitcoin that’s also it’s major weakness, that anybody could create their own version of bitcoin.
In fact, there are now so many versions of cryptocurrency that all of them, in my opinion, has no value.
Cryptocurrency can be created so easily, there’s no mathematical limit to the number of cryptocurrency variations that can be made. Anybody with a block chain can their own version or version of cryptocurrency.
And when something has unlimited supply, it has no value.

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