Money is backed by goods and services already created + other real things like consumption, etc... Then we had a need to create money to easily exchange between these things.

Bitcoin on the other hand already comes with a random value of $650.00 usd with no good, no services previously created, no VALUE. It's just one giant gamble, in my view.

Again, I am sure I am wrong, but I have yet to read anything that convinces me.

EDIT: Actually it is not one giant gamble. That was the wrong analogy. Bitcoin is more like a card trading game where the players get cards for making them or solving a problem related to the game. So yes, you can later take those cards and sell them, but it really becomes the last fool game.

All these are ties to some fundamental value to society. If gold goes down, manufacturing will buy more of it because they use them for ICs and lots of other things. Most companies have some tangible assets behind them. If a stocks price goes far enough down someone might buy up a controlling stake and liquidate all the assets. A fiat currency in a functional state is generally strongly tied to borrowing for real physical assets. It’s deeply entangled with the economy.

There is no bottom for Bitcoin. Especially now that it’s not a very viable currency for most purchases or for lending.

What’s more, value is continually being extracted from the currency. People cashing out and payments to miners (who are basically just burning a lot of the money they make by converting electricity to heat without doing much useful work).

In gold or stocks the money put in actually exists in something valuable to society, and you own a piece of that. The the value might be boosted up 2-10x its real value today, perhaps due to its perceived future value. But you do own a piece of something tangible.

With Bitcoin, the money you put in is already gone. Used by a miner to pay for electricity or an early miner/purchaser who is now cashing out to buy an apartment. You just gotta pray that a few years down someone is willing to buy bitcoins from you for its perceived value alone. Because nobody is going to buy it for any other reason. Not to make something out of it (gold), not to liquidate the assets behind it (stocks), and not to pay taxes or pay back their mortgage (fiat currencies)

There’s so much utter insane and thinking around cryptocurrency these days. Especially Bitcoin. It’s madness.

I mean, it’s a super cool tech. But I think that blinds a lot of people to the facts around it.

For now, the fundamentals are simple: supply side is fixed and known, and demand is speculation.

In the ideal case for bitcoin, over time, people will gradually use bitcoin more for actual commerce. As this adoption increases, liquidity increases, and price becomes less volatile. The speculation we have now is the necessary first step on that road, because it gives bitcoin a price (i.e. props it up) and gives it some liquidity.

People complaining that bitcoin is just for crime are slandering it.

People complaining that it has no intrinsic value don't understand that nothing in the world has intrinsic value, including gold. Intrinsic value is bad monetary theory derived from bad philosophy.

A tulip looks pretty in your garden, (many) internet companies make money, and houses are a basic necessity. Bitcoin, on the other hand, is a purely social phenomenon. It has value only because other people think it has value.

The argument trotted out at this point is some variation of "but there is value in having an anonymous, decentralized currency." And that may well be true. But the high valuation and extreme volatility of bitcoin (not to mention its inherent deflationary character) is actually a hindrance to its use in that manner. Who will accept bitcoin if its value can fluctuate 100% in an hour, and who will spend them if their price just keeps going up?

Bitcoin makes 0 sense to me as an investment. It's pure speculation with no underlying intrinsic value. It's the Dutch Tulips 10.0 basically.

And now because the value of bitcoin is unbelievably volatile, it now makes 0 sense as a means of payment.

And that's telling, because it indicates that bitcoin isn't a medium of exchange, it's an investment denominated in dollars. People are talking about the "price" of bitcoin more than anything these days, but that's not why people choose a medium of exchange. Bitcoins shouldn't be exciting, they should be boring, and dependable. As boring and dependable as a dollar bill.

The value of the bitcoin is the money invested in it that alone can be used for something where the need for transactions aren't high, as an example for large international contracts.

I don't know anyone with just the slightest understanding of bitcoin who believe it's a currency anymore.

1) I don't see that Bitcoin can escape any boom-bust cycle. I don't. Arguably the dollar can't either, but I think that's part of my point: that's with people _trying_ to regulate it. Bitcoin ultimately has a finite economy, which means that it's only stable if it is constantly deflationary (unless the population size stays the same I guess? I'm not going to make _that_ assumption) and _that_ motivates hoarding, which locks down currency.

You can _maybe_ construct some differential equation where the amount of hoarding is balanced out by the amount of 'cashing out' as people give up hoarding to spend freely, but that's a _heck_ of a wild guess to base a currency on. And anything _less than that perfection_ will inevitably result in boom-bust: freeze until you sell your dough, therefore simultaneous motivation to sell, therefore flooding of market, therefore crash. Which tangentially brings up:

2) In the above example, Bitcoin is (like any other currency) a surrogate of value for the things you can _do_ with it, which tells us that value lies outside of currency altogether and that currency is just a measuring stick. And therefore...

3) Bitcoin is essentially _still_ a fiat currency, but without the benefits of, you know, a significant support base. Sorry, you can go into almost any bank in the world and exchange an American dollar for local coin. I'd rather just _abolish money_ than supplant it with even _more_ imaginary money.

Sure, some counterculture activity subsists on Bitcoin. Sure, it's a neat thought experiment. But I can't see it becoming practical (read: successful).

So why is a BitCoin worth anything? It's scarce, but what utility does that scarcity have without some entity who guarantees to convert it into goods or services?

humans trade on credit not by exchange. Always have done.