Common Bitcoin Fallacies


Common Bitcoin Fallacies

Bitcoin does not have any utility.

Bitcoin is money and money does not have many uses other than being money. It's an intrinsically worthless paper without any other utility or an entry in a database. That being said, money is one of the most important inventions we ever made and modern civilization could not exist without it, Money is only useful for financial uses: that means it is either a medium of exchange, a store of value or an unit of account. It's boring but very important. Money is a >$100 trillion market and Bitcoin can fill some niches within this market and capture a smaller or bigger percentage of it. Whether people use it as digital modern version of gold, as a decentralized saving account, to make uncensorable and irreversible online transactions, remittances, micro-transactions with LN, as an alternative to banking where banking is not available, protect themselves against hyperinflation of their local currencies or against corrupt regimes, or just add it to their investment portfolio to diversify all of these are legitimate uses of bitcoin for which there will always be a certain demand.

Bitcoin is a zero sum game therefore it can't be an investment

A lot of things people invest in are zero sum investments. Gold, art, wines, currencies, commodities, derivatives. options, futures are all examples of zero sum investments some of which have existed for hundreds or thousands of years.

Bitcoin does not have an intrinsic value therefore the fair value is zero

A lot of things that people buy or invest in don't have an intrinsic value. Gold, art, collectibles and fiat currencies don't have any intrinsic value and yet they have a constant value above zero.

Bitcoin consumes as much energy as an entire country.

This argument is often used by journalists trying to manipulate their readers. Why use country but not compare them to the energy consumption of other things? Video gaming and tumble dryers consume as much energy as Bitcoin but no one perceives them as energy wasting. Country is used because people perceive countries as huge but they perceive gaming or dryers as small and insignificant sources of energy consumption.

In reality Bitcoin uses only 0.15% of global energy worldwide a fairly insignificant number. Cattle farming is estimated to generate 15% of global greenhouse emissions, 100x more than Bitcoin and yet some people seem to be feel far more threatened by Bitcoiners instead of meat eaters.

Bitcoin can't scale

This does also imply that because Bitcoin can't scale now it never will. The truth is that while the base layer has a limited TPS capacity, Bitcoin doesn't need to perform all it's transactions on the first layer so claiming that Bitcoin as a technology can never scale would also assume that no building on second layers will ever happen which is of course contradicted by the fact that efforts are being made to build on second layers. As demand for transactions goes up there is an incentive to build more capacity on other layers of the network.

Bitcoin is too volatile

This does also imply because Bitcoin is volatile now it will always be that volatile. There is no reason to believe volatility in Bitcoin is constant. Volatility is a reflection of market maturity. 2012 Bitcoin was far more volatile than 2022 Bitcoin and that trend to lower volatility will continue. Recently Bitcoin was less volatile than the Dow Jones or Nasdaq.

Bitcoin has failed or it will never be adopted

In reality Bitcoin is already held and used by hundreds of millions, an user base that is already bigger than many fiat currencies.

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