Quote from: JorgeStolfi on March 21, 2015, 09:29:10 AM

Quote from: Tzupy on March 21, 2015, 08:23:31 AM

Quote from: JorgeStolfi on March 21, 2015, 07:34:04 AM

...The bitcoin system does not create any real wealth (food, homes, cars, boat rides, haircuts...) ...

You are mistaken, bitcoin (the network) is a service, just like hairdressing. It fulfills the needs of small fraction of the society, although with a stupid waste of computing power / energy.
As long as dark markets and like will continue to use bitcoin, it will have intrinsic value. When / if they will stop, only then the value will converge towards 0.

"Intrinsic value" is difficult to define and measure; but, anyway, for the purpose of evaluating the contribution of a currency to society one should not count the purchase power of the currency itself as real wealth.

It is true that bitcoin, if it works as planned, should have a positive contribution to society: namely, it should reduce the fees of certain payments and money transfers. (Those fees transfer some real wealth from society in general to the banks and other financial intermediaries. While this process does not destroy real wealth, it may be argued that it is morally wrong, because the amount of wealth transfered is too high considering the service rendered by the bank.)

However, this hypothetical positive effect of bitcoin will be very small compared to its "pyramid effect", the unwarranted transfer of wealth from late adopters to early adopters; and will probably be much smaller than the wealth destroyed by mining.

Currently, mining costs about a million dollars per day. Most of that amount corresponds to destruction (consumption) of real wealth (mainly electricity and equipment), the rest being real wealth transfered from new investors to the miners (as minig profits and salaries). Allowing for changes in price and profitability, I would guess that, since it started in 2009, bitcoin mining has destroyed (consumed) at least 500 million dollars of real wealth. The total amount of bank fees saved in that interval cannot be more than 50 million dollars. As for the "pyramid effect", I have no idea of how it could be determined, but it too must be in the hundreds of millions. And I cannot see these proportions changing much over the next 20 years.

Your argument as to the cost of mining destroying wealth is not new and in your case may be disingenuous in its use. I seen this attempt at misinformation before however there is no "destruction" of economic value as the payments are still in circulation just not in the BTC economic network. Until those that sell us the electricity begin to use and hold BTC.

At this time moving Fiat value into bitcoin is becoming simplified however due to "issues" real or imagined that value is leaving the BTC economy and going back into Fiat when we pay for the electrical service fee's.

Update: I wanted to add that the concept used to equate BTC to the "pyramid effect" is shared if you were to equate Berkshire Hathaway Inc. to a "pyramid effect" and all costs to maintain the trading servers and techology including the effort to maintain its value equates to wealth "destruction". Berkshire Hathaway Inc.(NYSE:BRK.B)"145.53 +0.65 (0.45%) Mar 20 - Close NYSE real-time data "