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Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

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Re: Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

#31

Post by jraedisch »

defertoreptar wrote: post #5
jraedisch wrote: post #3

There is a lot of work done in analyzing holding patterns. Would probably be interesting to see comparison to usage and price of gold as a store of value. For me, buying and holding seems to be legitimate usage. I guess that would count as "speculating". What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0?

> What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0? It depends on the price. If the price if above what it's "real" value will be (after factoring in later deflation), then you'd sell it.

Yes, I would, provided there is another asset that I would expect to appreciate against it.

Also there is a difference in short term and long term. In short term one might sell only to buy again after corrections, but this is risky/hard to time.

Re: Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

#32

Post by jraedisch »

ineedasername wrote: post #29
jraedisch wrote: post #3

There is a lot of work done in analyzing holding patterns. Would probably be interesting to see comparison to usage and price of gold as a store of value. For me, buying and holding seems to be legitimate usage. I guess that would count as "speculating". What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0?

Comparing to gold as a "buy & hold" store of value is only viable as a future possibility. Bitcoin has been too volatile to qualify as a store of value. If that changes, so too might its legitimacy for this use. But for the average investor/institution looking for a non-sovereign store of value, a year of stability isn't going to be sufficient. Maybe 5 years would convince, but then that puts bitcoin's legitimacy as…

I am ok with that.

Re: Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

#33

Post by Theodores »

village-idiot wrote: post #11
ohaideredevs wrote: post #7

Earlier quoted context omitted.

This is beating a dead horse and the typical argument, but the same can be said for gold. Its "intrinsic value" in terms of practical application is far lower than the market cost given the plentiful substitutes for high current / low heat transmission applications. I really do wonder why Bloomberg hates Bitcoing. If you read through a history of their articles, they REALLY hate it.

Gold’s special place in the western canon is really just a cultural artifact. Not only are there a variety of metals that could take its place as an investment vehicle (silver, platinum, and rhodium among others), but historically a variety of metals were used for currencies and transactions. Bronze, brass, lead, and salt were all once used as currency, but have long since just become “base” metals. On the opposite e…

The Chinese were first to print money and the first to get into difficulties by printing too much. After this silver became the store of value and the currency.

Hence the Opium Wars, the only way for UK/USA to get silver out of the Chinese economy. China had no interest in sub-standard Western goods and only wanted silver in exchange for their fine porcelain, silk and other goodies. Getting the whole nation on drugs and defending that trade with gunboats was a way of getting silver, silver being needed in the West for paying soldiers/mercenaries.

Such proud history we have, enslaving India to get the opium, selling it in China and getting silver back to buy legit goods from China.

Re: Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

#34

Post by jraedisch »

empath75 wrote: post #12
Nursie wrote: post #4

Earlier quoted context omitted.

> What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0? Do you expect to increase in price solely because there are a limited amount? There are many things which have that property, but are not good stores of value. Your ability to sell it later for more money is based on continuing demand. Unless there's some other use case, where is that demand goi…

Why not create a cryptocurrency with a single coin? It should have infinite value :)

IMHO one should not accept alternative cryptocurrency, since they can be seen as a form of inflation, which is against Bitcoin's idea.

1 or 21 million does not really make a difference, as long as they are infinitely divisible.

Re: Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

#35

Post by seibelj »

HN is full of bitter commenters who have been predicting the death of cryptocurrency for a decade, and it hasn’t come true. A community that learned of Bitcoin right as it was invented, dismissed it, and missed out on huge fortunes.

Well, some people here thought for themselves and analyzed the technology and ideas on its merits. Just not the people who comment on these posts.

Re: Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

#36

Post by gwbas1c »

sprash wrote: post #24

The instability and the high fees make it useless for generic payment. The lighting network was supposed to fix latter problem. As soon as the bitcoin price becomes stable it will be useful. As soon as it is useful it will swiftly rise in value and become unstable again. We have already seen several iterations of this cycle. Who knows when this will end.

Which brings up another important point: Typically, when someone wants someone to adopt their currency, they actively work to ensure that the currency has a stable value.

Think of historical examples of governments buying and selling each others' gold and silver coins; or more recently governments actively buying and selling gold and silver in their currency; or even more recently governments holding reserves of other countries currency.

The historical purpose is to ensure that a currency has a stable value, and is readily available for anyone who wants to use it.

No one does this with Bitcoin. The incentives are to use the currency as a speculative bubble, instead of as a means of commerce.

Drawing an analogy, in order for Bitcoin to work, there would need to be a "Bitcoin authority" that basically holds a huge reserve of Bitcoin or another commodity, and buys and sells to keep the value stable. Bitcoin goes up in value: Sell Bitcoin for some commodity, Bitcoin goes down in value, sell the commodity for Bitcoin.

(Of course, a Bitcoin authority goes against the general anti-government promise of Bitcoin.)

Re: Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

#37

Post by jraedisch »

empath75 wrote: post #10
ohaideredevs wrote: post #8

Earlier quoted context omitted.

"My toenail clippings are limited in quantity, but valueless." Indistinguishable from other toe-nail clippings, for which supply is not limited. Not easy to transport internationally quickly.

Bitcoin is indistinguishable from any of its various forks. Cryptocurrency tokens as a class are not rare.

Yes, it is. It is the first, arguably the most decentralized and safe, and absolutely the most valuable (by market cap) and thus most trusted store of value.

Re: Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

#38

Post by rawrmaan »

seibelj wrote: post #35

HN is full of bitter commenters who have been predicting the death of cryptocurrency for a decade, and it hasn’t come true. A community that learned of Bitcoin right as it was invented, dismissed it, and missed out on huge fortunes. Well, some people here thought for themselves and analyzed the technology and ideas on its merits. Just not the people who comment on these posts.

You analyzed Bitcoin on its technologies and merits and concluded that it’s a useful currency? Yikes.

Re: Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

#39

Post by gwbas1c »

village-idiot wrote: post #2

I’m not sure why anyone in their right minds thought bitcoin was going to be used by random civilians for their everyday transactions. Customers want the protections that banks and credit cards provide, and vendors don’t want to expose themselves to exchange rate risk when selling goods and services. Oh, and 4 transactions a second is far too low a limit for any currency.

For what it's worth, the Bitcoin paper points out that it's an experiment. Most people seem to gloss over and forget this critical point.

(I've always been in shock at how many people don't realize that it's a poor currency, but a useful experiment overall.)

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