Issue #568: How does Bitcoin retain value?

A common weak handed FUDline that's consistently flailed towards Bitcoiners is that it is a pOnZi ScHeMe. The price only continues to go up because greater fools keep entering the market. Paying for the bags of early adopters and then turning and looking for more greater fools to dump their bags on. A long game that will eventually end when there are no greater fools left to pass the bill to. Duh. Move along.

The question seems reasonable: Once Bitcoin is widely adopted, the future value from speculation will indeed be zero. But that ignores half the picture - where has that speculative value gone? And does it mean that earlier buyer now have an incentive to sell?
— Hasu (@hasufl) September 12, 2019

What was seen as speculative value during the earlier adoption stages was merely the discounted use-value of later stages. In the beginning, Bitcoin had no use-value. In the end, Bitcoin has only use-value.
— Hasu (@hasufl) September 12, 2019

To wrap around to the initial question, a potential investor should ask himself whether a mature Bitcoin system is genuinely useful to him and others.

If the answer to that is positive, there's no reason to expect the system to unwind as more people join.
— Hasu (@hasufl) September 12, 2019

What the critics who fecklessly trot out the Ponzi trope do not realize is that they make a lot of dumb assumptions. The biggest of which is that the market won't find any value in an unstoppable distributed system driven by the hardest digital asset the world has ever seen. A system that works to facilitate the transfer of the data we claim as digital gold. A system that anyone can join, validate, and contribute to.

To think that Bitcoin as a system acts in the same fashion as a Bernie Madoff run Ponzi scheme is asinine. It simply does not compute. Bern was consuming his clients' wealth without providing any utility at all. Bitcoin enables individuals across the world to protect their wealth and distribute it how they see fit. As our friend Hasu points out, Bitcoin is a network good that becomes more useful as its network grows. If more people are willing to receive and hold bitcoin, more potential economic activity is enabled. Making it more likely that the system develops into a closed loop that is able to retain value over time. Or as Hasu says in a much more eloquent way, Bitcoin will have way more use-value in its late adoption phase.

Go forth! Share this rag with any of the lazy people in your life who like to fling this weak excuse of a critique at Bitcoin.

I know they're still out there because our dear precoiner friend Angelus Merula serendipitously hopped into my menchies as I was writing this issue to warn us that Bitcoin is, in fact, a Pyramid scheme.