Chat GPT Chimes in on Bitcoin
And, Bitcoin crosses $30,000!
Had some fun with ChatGPT last week. ChatGPT is, of course, the hot new artificial intelligence app that debuted in November. It was developed by a company called OpenAI Limited Partnership, which was formed in 2015. Naturally, I asked the app a bunch of questions about Bitcoin.
ChatGPT gives fairly long, detailed answers to inquiries. Stuff suitable for maybe a high school term paper. And in perfect English grammar. It’s a more sophisticated, concise version of, say, Wikipedia. And it can answer some very specific questions.
On the question of “What is Bitcoin,” ChatGPT gave a rather long, precise answer. Here are the highlights:
“Bitcoin is a decentralized digital currency that allows for peer-to-peer transactions without the need for intermediaries, such as banks.” Sounds promising, right? Here’s more: “Bitcoin has gained significant attention as a disruptive technology that has the potential to reshape the financial industry, with proponents advocating for its decentralization, privacy, and security features.”
One the question, “What can Bitcoin be used for,” the chat bot gave a thorough and very accurate answer. It is gathering extensive facts about Bitcoin’s uses and potential, and is telling the world. Very bullish. The answer:
1. Peer-to-peer transactions: Bitcoin can be used to send and receive payments directly from one party to another without the need for intermediaries, such as banks or payment processors.
2. Investment: Some people view Bitcoin as a form of investment, similar to traditional assets like stocks or real estate.
3. Store of Value: Bitcoin is often referred to as "digital gold" due to its finite supply limit and potential to serve as a store of value.
4. Payment for goods and services: An increasing number of merchants and businesses accept Bitcoin as a form of payment for goods and services.
5. Remittances: Bitcoin can be used as a means of remittance, allowing individuals to send money across borders in a potentially faster and cheaper way compared to traditional remittance methods.
6. Privacy and censorship-resistant transactions: Bitcoin transactions are generally considered to be pseudonymous, which means that they do not reveal the real-world identity of the parties involved.
“Is Bitcoin More Stable Than the US Dollar?”
“No, Bitcoin is generally considered to be more volatile and less stable compared to the U.S. dollar, which is a widely used global reserve currency. The value of Bitcoin can fluctuate greatly in a short period of time, and its price has historically exhibited high levels of volatility.” ChatGPT went on to say, however:
“While the U.S. dollar is generally considered more stable than Bitcoin, all currencies, including the U.S. dollar, can still experience fluctuations in value due to various factors, such as inflation, changes in economic conditions, geopolitical events, and market forces.”
The answer does acknowledge that while Bitcoin is volatile, the dollar will tend to depreciate steadily over time with inflation. See below:
“Is Bitcoin Decentralized?”
“Yes, Bitcoin is generally considered to be a decentralized digital currency. Decentralization is one of the core principles of Bitcoin and is often cited as one of its key features.
Bitcoin is decentralized in the sense that it operates on a distributed peer-to-peer network, without any central authority or single point of control. Transactions on the Bitcoin network are verified and recorded on a distributed public ledger known as the blockchain, which is maintained by a network of independent participants known as nodes or miners."
“Is Bitcoin Popular?”
"Yes, Bitcoin has gained significant popularity since its creation in 2009. Over the years, Bitcoin has grown from a niche project to a globally recognized and widely used digital asset. Bitcoin has attracted attention from various sectors, including individuals, investors, businesses, and even governments.”
This seems accurate to anyone who has studied Bitcoin for a while. There are still the “Never Bitcoiners” out there will say it is a worthless technology and isn’t “real money.” Warren Buffett said so just this week, in an interview of CNBC. He’s probably not open to exploring a new technology like ChatGPT either.
Buffett only invests in things he understands, and that’s sound advice.
AI and Crypto Trading
By gathering years of trading data, ChatGPT can actually make pretty good trading recommendations regarding Bitcoin and other cryptocurrencies.
It’s one area where AI may produce reliable data and opinions. It does shy away from making predictions, and always states a disclaimer about predicting future events, but can analyze trends in trading and point out turning points in prices.
“ChatGPT’s proper analysis and automation possibilities can completely reshape the cryptocurrency market. ChatGPT can assist investors and traders to make more well-informed and tactical choices by supplying real-time data and insights, letting them maximize price developments and opportunities in actuality.”
And Some Fun Stuff, Too
“Does Elizabeth Warren hate crypto?”
“As an AI language model, I don't have the ability to know or interpret the personal opinions or feelings of individuals, including public figures such as Elizabeth Warren, a U.S. Senator and prominent politician. Whether Elizabeth Warren "hates" cryptocurrencies, including crypto, is a subjective question that can be influenced by various factors, such as her policy positions, statements, and actions related to cryptocurrencies.
It's worth noting that Elizabeth Warren has been critical of cryptocurrencies in the past. She has expressed concerns about the potential risks and challenges associated with cryptocurrencies, including issues related to consumer protection, market volatility, and regulatory oversight.”
“Is Bitcoin the new gold?”
“Bitcoin is often referred to as "digital gold" due to some similarities it shares with gold as an investment asset. However, it's important to note that Bitcoin and gold are fundamentally different in many ways.
Similarities between Bitcoin and gold:
1. Store of value: Both Bitcoin and gold are often considered as stores of value. They can be seen as assets that can potentially preserve wealth over time, as they are not subject to inflation and can act as a hedge against economic uncertainties.
2. Limited supply: Both Bitcoin and gold have a limited supply. Bitcoin has a maximum supply cap of 21 million, which means that only 21 million Bitcoins can ever exist, making it a scarce asset similar to gold, which has limited availability in the Earth's crust.”
What Are Bitcoin Maximalists?”
“Bitcoin maximalists are individuals or groups who hold a strong belief in the superiority and potential of Bitcoin compared to other cryptocurrencies or blockchain technologies. Bitcoin maximalists typically advocate for Bitcoin as the dominant and ultimate form of digital currency, and often express skepticism or disdain towards other cryptocurrencies or blockchain projects.
Bitcoin maximalists typically promote the idea that Bitcoin is the original and most secure cryptocurrency, with a limited supply, strong decentralization, and a proven track record of adoption and acceptance. They may argue that Bitcoin is the "digital gold" or the truest form of digital money, and that other cryptocurrencies are inferior or unnecessary.
Bitcoin maximalists often have a long-term, "HODL" (hold on for dear life) investment strategy, believing that Bitcoin will continue to appreciate in value over time and that it has the potential to become a global reserve currency or a new form of sound money.”
Is Bitcoin experiencing the Lindy Effect?
“The Lindy Effect is a concept from probability theory that suggests that the longer a non-perishable item has existed, the longer it is expected to continue to exist in the future. It is often used to describe the potential durability or staying power of certain technologies or ideas.
Link to earlier story in the Lindy Effect”
Bitcoin, as a digital asset and cryptocurrency, has been in existence since its launch in 2009, and it has shown remarkable resilience and longevity compared to many other cryptocurrencies that have come and gone over the years. Bitcoin has weathered various challenges, including regulatory scrutiny, market volatility, and technological developments, and has continued to operate as an open-source, decentralized digital currency with a growing user base and acceptance.”
Exactly. It seems like it’s here to stay. The Open AI Chat bot was fun. Play around with it.
Disclosure: OpenAI’s ChatGPT has suffered its first major personal data breach. The breach came during a March 20 outage and exposed payment-related and other personal information of 1.2% of the ChatGPT Plus subscribers who were active during a specific nine-hour window, according to a blog post by OpenAI Friday, March 24.
NOTE: Bitcoin’s price topped $30,000 this week, the first time it’s hit that level since May of 2022!
And Bitcoin is up over 80% in 2023. It’s the best-performing asset class in the world over that time!
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Issue No. 104, April 14, 2023
Rick Mulvey is a CPA, crypto consultant, and frequent contributor to Bitcoin Magazine. He writes about all things Bitcoin, and yells at the Yankees and Giants. He also runs marathons and makes wine, neither professionally.