To me an asset that moves 15% in a day, and which no-one knows what it's truly worth, isn't great as a store of value. I'm not going to speculate about where bitcoin will be trading when it becomes a stable, useful asset, but in order to justify a market cap anywhere near this high it will eventually need to generate actual utility for its users. Can someone explain where that will come from? Cheap currency conversio…
It may be some time until $100M of daily churn doesn't result in a 15% price swing. The market capitalization of BTC would need to increase considerably to accommodate such a scenario. And it looks like we are quickly approaching such a scenario. The rich (and super-rich) have a lot of resources to move markets and BTC is currently especially susceptible to this.
Bitcoin Surges Past $7,000 to Extend Record Rally
111–120 of 437 posts
Re: Bitcoin Surges Past $7,000 to Extend Record Rally
#112I consider myself pretty tech-savvy, but I'm still completely lost as to whether Bitcoin is basically a pyramid scheme set to crash massively, or something huge that will continue climbing. I probably should've taken the time to mine some back when my friends were doing it and tried convincing me too. Ah well. (Queue heated comments from both sides. Discussing bitcoin is like bringing up religion AND politics at the…
Cryptocurrencies have a niche use, mainly to buy things on the black market but also for small peer-to-peer international payments when other options are not practical. For this reason I don't expect that cryptocurrencies will completely disappear any time soon. However the value of bitcoin is mainly driven by speculation at this point, a currency that's so volatile is very difficult to use if you're a business. At b…
Note that any business that already deals in multiple currencies (say, having offices in two countries) already runs an equivalent risk. And many use their currencies to make a bit more money on the forex market.
Re: Bitcoin Surges Past $7,000 to Extend Record Rally
#113Earlier quoted context omitted.
Ultimately that's true of any non-backed currency (and those too I suppose) isn't it, it's just the bet looks far safer for a country/region wide fiat currency. I wonder if much of the medium term success of Bitcoin has been because the money put in couldn't be laundered readily in any other way, so whilst Bitcoin is a relatively high risk the alternative was just to dump the money without a way to use it?
If it's intended to be a store of value, it's an asset, not a currency. Like property.
And why would it matter what's the "intended" usage of it? Who determines intent? Might every holder of the asset/currency/property (whatever one calls it) have different intentions for it?
Re: Bitcoin Surges Past $7,000 to Extend Record Rally
#114Earlier quoted context omitted.
I save more than I spend, so wouldn't I be mainly using it as a store of value rather than a medium of exchange?
Technically yes, you are treating it as a property rather than currency. Such a property is subject to positive and negative externalities (notably, inflation/deflation), and (where applicable) it is subject to taxation on transference (eg: inheritance tax, gift tax, etc). From a purely economic perspective, cash is just another liquid asset. The distance from currency to store of value is quite short. Physical asset…
Re: Bitcoin Surges Past $7,000 to Extend Record Rally
#115Earlier quoted context omitted.
They're actually democratic, the majority wins. Majority of what? Not the demos, I bet; not so democratic. Majority of bitcoins? Majority of processing power?
Majority of participants in the network. I run a full node, I don't mine, but my voice counts. Of course I don't like the weight of huge mining farms, and I hope there will be viable alternatives to proof of work, to make BTC more democratic. In the meantime, not a single country controls BTC, and even heavy weight miners can't decide unilaterally...
Re: Bitcoin Surges Past $7,000 to Extend Record Rally
#116Earlier quoted context omitted.
(i am somewhat familiar with the tech but don't follow the business side of bitcoin) what I find weird is the forks. A major selling point of bitcoin is that there will ever be only 21 Mio coins. You know, unless there is a hard fork and now there are suddenly twice as many coins. Presumably one of the resulting coins' value will drop but you are still creating value out of thin air, something that the crypto people…
> I am sure blockchain tech will be hugely successful in the banking and government sector Are you? Why? So far, no bitcoin/blockchain advocates have been able to explain to me a single non-illegal use case that isn't better served by a traditional, centralized database. A single large Postgres instance could handle all the global transaction volume of bitcoin, and it would be faster and orders of magnitude more ener…
Any given piece of data is, usually, required to be private to a small number of parties but is, usually, all required to be available to some parties i.e. regulators.
Doing all that is absurdly costly and error-prone. And that's when you're doing it well. Do it badly and the costs are eye-watering (ask, well, anyone).
Some of the ideas and techniques, particularly the cryptographic ones, used in the blockchains have opened the banking folks eyes to what could be possible. And this is a very active area of interest.
But it's not the bitcoin blockchain, per se, that's particularly interesting. For example, the trustless piece is largely a pointless waste in the problem I outlined above. We know all the participants and can safely move keys etc around. In the same vein, proof of work is unnecessary, we can identify block creators and easily use external remedies if they play silly buggers (no-one is suggesting we get rid of all our lawyers).
Now, you could argue that, if using the relevant techniques, you could keep all of that in a big, central DB and you'd be right. But it's not "big, central"-ness that's key. It's the "globally ordered, immutable, common"-ness. Along with selective privacy. Postgres doesn't give us what we want any more than Bitcoin does. The real change has been that we know relational DBs really well but we're learning about the possibility of the crypto and block chain tools. It's as much a mental shift as a technical one.
One final, minor point. A central DB, though possible, would be quite painful in practice. Although not fundamental, having a distributed ledger is actually quite handy. Although it would mean that we wouldn't completely do away with reconciliation hell, it wouldn't surprise me if something like a gold copy plus validated replicas approach or similar became popular. And again, some of the crypto techniques make this sort of thing much more tenable.
Re: Bitcoin Surges Past $7,000 to Extend Record Rally
#117Earlier quoted context omitted.
There's no pyramid scheme. It's a hyped asset, to say the least, but there's no pyramid. Like a hyped startup, it doesn't do much yet, but it is promising, so people buy it. It may be "worth" much or zero in the end, it all depends on the final outcomes. It's also the easiest/cheapest/most open asset to trade (depending on where you trade). In the long term, Bitcoin can be seen as a safe heaven in case of economic ch…
You talk about a “final outcome” as if at some point we will all collectively say “great. We are done with Bitcoin and it is from now on and forever what it currently is.” That’s not going to happen. It may hit a period of more stability than it has now, but I highly doubt there will be a final outcome.
I do think BTC is flying, but some are still sceptical, despite a 100B market cap...
Re: Bitcoin Surges Past $7,000 to Extend Record Rally
#118Earlier quoted context omitted.
If it's intended to be a store of value, it's an asset, not a currency. Like property.
I think I do not understand. If I possess a certain amount of currency, is it not my property? And why would it matter what's the "intended" usage of it? Who determines intent? Might every holder of the asset/currency/property (whatever one calls it) have different intentions for it?