Bitcoin
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So, the bitcoin has reached $10,000
http://www.bbc.co.uk/news/technology-42137408
The idea behind bitcoin is the blockchain, an open ledger, stored on a distributed network, where computers compete in a lottery to certify each transaction. Bitcoins themselves are generated by completing ever more complex formulas.
For details:
https://en.wikipedia.org/wiki/Bitcoin#Mining
This computing takes energy:
[quote-Charlie STross]Per this article, Bitcoin mining is now consuming 30.23 TWh of electricity per year, or rather more electricity than Ireland; [/quote]
http://www.antipope.org/charlie/blog-static/2017/11/unforseen-consequences-and-tha.html
The idea/attempt is to restore commodity money: it becomes progrssively more difficult to produce more bitcoins, so eventually there will be a stable supply, 21 million coins. Of course, that doesn't stop speculative bubbles around the commodity.
There is a real cost (in energy) amounting to 0.12% of global energy production, and I've seen estimates that each transaction costs around $38 of energy.
This is still the best analysis of Bitcoins:https://antinational.org/en/bitcoin-finally-fair-money/ A pontless attempt, and waste of energy and ingenuity, to recreate the anomynity of notes and coins. I'm sure we can think of a more socially useful way to use blockchains in socialism.
It is behind a paywall. The New Scientist on Bitcoinhttps://www.newscientist.com/article/mg23631540-500-bitcoin-in-the-balance-the-troublesome-quest-to-reinvent-money/
In her Notebook column in yesterdy's London Evening Standard Lo Dico said she had met a "crypto-currency idealost" who claomed that
Quote:had Karl Marx seen the power of computing he'd have seized on Bitcoin.I don't think so.Meanwhile there's an article on blockchains in this month's Socialist Standard also out yesterday:http://www.worldsocialism.org/spgb/socialist-standard/2010s/2017/no-1360-december-2017/pathfinders-rattle-blockchains
Just heard someone on the radio say that bitcoins were better understood as a "crypto asset" than as a "crypto currency", so I looked up "crypto asset". Clear explanation here:https://steemit.com/cryptocurrency/@cryptoassets/what-are-crypto-assets-and-how-do-they-workLike this articel, the person on the radio said bitcoins were more like gold than money, "digital gold" if you like which, like gold, people can use as store of value and speculate on its price going up (but it will go down as well of course).Made sense to me.
I was going to post on our reserve banking thread but perhaps here is just as appropriate“Venezuela will create a cryptocurrency,” backed by oil, gas, gold and diamond reserves, Maduro said http://fortune.com/2017/12/04/cryptocurrency-new-venezuela-economy/
Bit of a shame, with all of the economic knowledge in the Party, we didn’t buy £500 worth of bit coins for the party back in 2010. Would be worth about £500,000,000.00, by my calculations. Does any comrade have a workable proposal for a time machine?
Am I right in thinking with bitcoin transactions going down that the actual use value is going down, whereas the exchange value is going up as more people buy and hold?
Bitcoins do have a use-value (that of being a means of payment, a store of value, and for speculation). If bitcoin transactions are going down (but are they?) this would be a fall in their use rather than their use-value. That their price is going up reflects demand for them (for these uses, mainly speculation it seems). They don't have a "value" in the Marxian sense since they are not products of labour. Having said that, it does take a lot of time and energy for computers to "mine" them.
ALB wrote:Bitcoins do have a use-value (that of being a means of payment, a store of value, and for speculation). If bitcoin transactions are going down (but are they?) this would be a fall in their use rather than their use-value. That their price is going up reflects demand for them (for these uses, mainly speculation it seems). They don't have a "value" in the Marxian sense since they are not products of labour. Having said that, it does take a lot of time and energy for computers to "mine" them.Surely they are products of labour, the computer needs to be set up by human labour power to do the mining and the mining itself consumes electrical power, created by human labour power.Same thing applies to actual money, I suppose. Apparently the new plastic tenners cost 10p each to make.
From what I've heard Bitcoin is just a bubble waiting to burst. I'm not an expert on economics so I've never fully understood crypto-currencies
Is bitcoin a bubble phenomenon or is it a structural transformation of capitalist finance? My money is on the former. https://www.thestreet.com/story/14420899/1/bitcoin-could-make-banks-extinct-israel-pm-netanyahu-says.html Perhaps there needs to be a special issue of the Socialist Standard specifcally devoted to cryptocurrency and currency crankism
Bitcoin is not money.Bitcoin was never designed to function as a social means of exchange.Bitcoin was designed to function as a means of speculation.It was designed to be a virtual embodiment of speculative desire that is carefully restricted to privileged speculators, but marked out to evoke unrealisable desires in the enthusiasts who would fan its essential speculation from the fringes.Bitcoin is intentionally dynamic. It is intentionally too unstable to function as a trustworthy standard of wealth, to function as a means of general payment, to function as money.Even if it were stable, bitcoin would be at war with money. “A double standard of value is inconsistent with the functions of a standard” [Marx Capital Vol. 1].Bitcoin is far easier than material wealth (such as speculative artworks, jewelry, etc.) to effect commercial transactions with. It embodies fictional price, freed from the burden attendant upon having to assume an actual physical body.Social faith in a non-currency like bitcoin ultimately rests on its convertibility into social currency, i.e. so long as it is convertible into money.Dynamic bitcoin can only function as speculative desire because it rests on stable money.Bitcoin is not its own ground.It is not money.
It is just another bubble
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