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Counter arguments

Couple of days ago, someone posted a request for sources of counter arguments against bitcoin to self check that they aren’t in an echo chamber. Very prudent imho.

I’ve been in bitcoin since 2014 so, fairly well convinced already and probably part of the echo chamber, but I’d be interested in peoples opinions on this podcast episode (for context last week he had max Keiser on). https://podtail.com/en/podcast/the-david-mcwilliams-podcast/182-why-now-is-the-time-to-go-for-a-wage-rise/

Just the first 18 mins or so. Trigger warning, he is a proponent of mmt and does drop the f word in description of crypto enthusiasts, so if you are easily triggered skip it

His main arguments against bitcoin and for fiat are

1. The renaissance problems when the Black Plague hit prevented political solutions as they were tied to the gold standard.
2. The Great Depression only ended because Roosevelt abandoned the gold standard in the 1930s.
3. German rise of nazism was caused by the financial difficulties and civil unrest of the time.
4. If we did not have fiscal flexibility and the ability to print money there would have been riots during the pandemic.

Hope posting this is not against the rules, would really be interested in your opinions and rebuttals. (Edited to add punctuation and typos)



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14 Comments

  1. Bitcoin doesn’t have to fix the financial problems of countries. They can (and will) continue to print as much fiat money as they want. I just want an alternative to their money, and bitcoin is that because it’s impossible to censor it. Bitcoin doesn’t have to solve all problems that exist because of money to be useful.

  2. Those guys are speculating money supply problems if only Bitcoin exists. Counties can still use their native currencies or CBDC’s. Print, debase, inflate all they want based on whatever is going on there, to help whatever situation they have going on. It will just mean their currency will be worth less Bitcoin. We didn’t mine more gold in order to print more money because the pandemic hit?

  3. https://medium.datadriveninvestor.com/why-bitcoin-is-the-hardest-money-in-the-world-8c0f6487122f

    **Why Bitcoin is the hardest money in the world**

    > Why is Bitcoin the best form of hard money ever invented? Let’s find out by comparing it with the competitors and the asset it is often (wrongly) paired with.

    > Gianmarco Guazzo

    > Jun 1 · 5 min read
    >

    > Very often when talking about Bitcoin with people who have just met it there are many questions that arise and sometimes remain unanswered. From this point of view, the media certainly does not help novices to deeply understand the intrinsic qualities of cryptocurrency by bringing examples and false myths that result in extreme ignorance in the field. It all starts with a simple step that no one takes to fully understand how Bitcoin works: reading the whitepaper. The analogy is similar with any equipment and software language that surrounds us: before using it or allowing yourself to have an opinion about it maybe it’s good to read the instruction booklet. Knowledge of the inner workings therefore leads mainstream finance experts to compare Bitcoin to Dutch tulips in the 1600s rather than other systems that have nothing to do with cryptocurrency. So let’s try to get some clarity in understanding why Bitcoin is the hardest currency ever invented on earth.
    > Tulip Mania
    > Let’s start right away by debunking the simplest and most naive of myths: Bitcoin is a bubble like the Tulip mania of the 1600s. The tulip bubble, or tulip mania, was a speculative bubble in the prices of flower bulbs that burst in the Dutch economy of the seventeenth century, perhaps the first documented bubble in the history of capitalism.
    >
    > The tulip, introduced to Europe in the mid-sixteenth century from Turkey, grew in popularity in the Netherlands, sparking a “race” among members of the middle class to outbid each other for possession of the rarest tulips. Before long, prices for tulip bulbs reached exorbitant heights. The basic problem with this speculative “bubble” was its nature. Tulips, being flowers, do not require great efforts to inflate the market and create new ones: it is enough a field, some bulbs and that’s it. In this case, therefore, the bubble burst because of the simplicity of inflating the circulating supply of these flowers. Given the exorbitant prices that had been created anyone could grow the plant and resell on the market for a profit. In this sense, if we really want to find a comparison, tulips are much closer to the euro and the dollar than to Bitcoin.
    > Fiat Standard
    > Let’s then move on to the still-used ancestor of the famous Dutch tulips: fiat currencies. Fiat Currency are all coins whose supply is managed by central banks and are the most widely used form of currency in the world. They have no upper limit in absolute terms and can be inflated at will by those who have the monopoly: does this remind you of something? Leaving aside what supports fiat currency as a physical asset since it is beyond the scope of this article, the characteristics are very clear. The only difference with tulips is the monopoly of currency that is in the hands of an institution that is supposed to be able to do the good of its citizens. Humanity throughout its history has seen many examples of fiat currencies and the end they all came to is definitely not the best.
    >
    > Gold Standard and the first hard money
    > After exploring the examples of soft money, i.e. money without a maximum amount, let’s change the subject and look at hard money. Hard money refers to a currency that has an upper limit in terms of supply and is difficult to inflate for both physical (gold) and code (bitcoin) reasons. Gold is the first example of hard money and it’s no coincidence that it is the only form of currency that over the years has survived at the expense of thousands of forms of fiat currencies that have followed over the centuries.
    >
    > Wikipedia — Trends in the top five gold-producing countries
    > Gold in fact has existed for more than 5000 years and during the history of mankind has been the currency that has accompanied the rise of human progress in all its disciplines. Actually there is no maximum amount of gold in absolute terms: the extraction of gold depends expressly on the physical conditions of where the material is located and how convenient it is to buy machinery to extract it. Gold is therefore said to be finite in relative terms: the more the price rises, the more incentive there is to find more of it. No one knows how much gold is still mineable, but its technical, physical and rarity characteristics have made it the most enduring asset in human history.
    > The Bitcoin Standard
    > We then come to the most innovative and technically superior form of hard money even to gold. Bitcoin and its supply are predetermined by the code that makes it work. Adding up the consensus algorithm, which produces a block every 10 minutes, and with a mathematical function, called Halving, that halves the amount mined with each block Bitcoin is a finite asset in absolute terms. Seen on a graph the amount of BTC that there will be in the next few years will reach an unassailable upper limit of 21 million coins which will approximately be reached in 2140.
    >
    > Bitcoin Halving & Supply over time.
    >
    > Aside from being therefore the hardest form of currency in absolute terms, Bitcoin carries with it an inherent quality that none of the previously mentioned assets possess. As the value increases, the coin mining cannot increase: the more the price goes up, the more miners will be incentivized to enter the network. The entry of more miners does not increase the speed of inflation of the asset but rather increases the security of the network with more and more computers and CPUs able to validate the new blocks and the Blockchain itself.
    >
    > Bitcoin, compared to all of its ancestors, is without a doubt the hardest form of currency that has ever existed. The incentives that hold cryptocurrency in place and the mathematical algorithms that govern it have allowed pre-existing workings with gold and the Gold Standard to be reintegrated into society. There are those who say that it will never work, that it is a bubble and that it is cannot withstand mass adoption. The arguments are always very weak and it is no coincidence that the media rides on the false myths of energy and crime. Bitcoin is an incensurable, decentralized, borderless asset that incentivizes financial and individual freedom. Perhaps the tulips are right in our pockets. Posterity will have the last word.

  4. I am also scared sometimes, wondering if I’m in an echo chamber. This is my 2 satoshis:

    1. **The renaissance problems when the Black Plague hit prevented political solutions as they were tied to the gold standard** – political solutions are overrated. See the handling of the pandemic.
    2. **The Great Depression only ended because Roosevelt abandoned the gold standard in the 1930s** – I believe the great recession was caused by cheap credit and was made worse by the interventions that followed.
    3. **German rise of nazism was caused by the financial difficulties and civil unrest of the time** – hyperinflation caused by money printing, what a joke argument.
    4. **If we did not have fiscal flexibility and the ability to print money there would have been riots during the pandemic** – see a pattern in these? This should not have been a thing.

    Interested to know what others think…

  5. >long list of unfalsifiable claims

    What if I don’t care about any of those things? I think you should be free to build utopia and fix all those problems by giving used-car salesman control of the printing press….thats fine with me.

    I just don’t want to live there.

  6. Germany’s financial problems were caused by the loss of WW1 and war reparations.

    2 and 4 are the reasons I don’t believe FIAT currency will ever go away. On top of that, long-term lending would be nearly impossible if we relied entirely on deflationary currencies like bitcoin.

  7. It’s interesting that all of these are really just arguments against sound money and disregard the fact that individuals will self-select sound money to maximize their fitness (in a broader evolutionary sense, Robert Breedlove does some good episodes on this). Like so many Keynesian economists he seems to think that people should be forced to fit into their model and won’t do what’s best for themselves.

  8. Point 4 is essentially why BTC is never going to be a functional currency. Without a centralised control, the only mechanism to stop people from *literally starving to death* is charity.

    BTC maximalists envision a return to a barter economy. That’s not progressive.

    It’s a speculative investment, it has attracted considerable capital and may attract a lot more yet. But it, inevitably, has a peak, the only question is where that peak is.

    The arguments in favour of perpetual BTC growth have boiled down to ‘if you don’t understand it, I don’t have time to explain it’. Well, I have a decent brain, I do understand it, and I think it’s silly. It will only last as long as the hype lasts. Granted, that may well be several multiples from where we are now, maybe several decades. It’s equally possible we’ve seen the peak already. It all hinges on how many people you sucker in for the ride.

    No disrespect intended, just my view. I think land and property is a much safer investment.

  9. > Couple of days ago, someone posted a request for sources of counter arguments against bitcoin to self check that they aren’t in an echo chamber.

    > I’ve been in bitcoin since 2014 so, fairly well convinced already and probably part of the echo chamber

    Leftists are always suggesting others to be on some kind of echo chamber about concepts they’ve mastered (bitcoin and economics in this case), but never acknowledge they leave in a perpetual state of echo chamber among their pears about the foolish concepts they sponsor.

    We don’t need to constantly challenge our believes because this have been done already in the process of reaching to the conclusions we’ve reached, and every time we encounter a challenge we naturally reevaluate what needs to be. This is called learning.

    Now, thanks for prompting us to waste time on all this foolishness debunked million of times.

  10. The 3 of the above problems happened because the currency became fiat first and since the economy didn’t catch up, the bubble burst. We may have come out of the great recession after abandoning the gold standard, but we sure entered that great recession because the FED couldn’t stop printing money from day 1 it was created (since 1913). At that time, they were just not aware about the rate at which the printer should have gone brrr and that printing money would bite the US in the back.

  11. Bitcoin just looks like another pump and dump pyramid scheme to me. All these people talking up how amazing bitcoin is, lecturing that it’s the future of money and blah blah blah, meanwhile their only real goal is to cash out their bitcoins for a profit of US dollars or whatever fiat currency.

    Doesn’t matter if it’s bitcoin, gold, land, collectibles, art, fucking beanie babies, or Dutch tulip bulbs, if your only objective is to buy low and sell high then you are playing the same game no matter what you call it or how convoluted your smoke and mirrors explanation is.

    If you intend to sell your bitcoin in the future for a profit then you are participating in a pump and dump pyramid scheme.

What do you think?

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