31–40 of 103 posts
I wonder when and if they will pass an act outlawing or “regulating” bitcoin/crypto like that was passed for gold in 1934: https://en.wikipedia.org/wiki/Gold_Reserve_Act Hillary Clinton talks about how crypto is a threat to currencies and especially to the dollar as a reserve currency (minute 29:30): https://www.bloomberg.com/news/videos/2021-11-19/great-power...
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Caveat, national currencies are secured with economic power, a system of law, culture, military power, etc etc. It is a bit different. They aren't perfect either but there is more supporting what people "think" they are worth here. Bitcoin has it own culture and history, but it is still a baby. I do think bitcoin is a bit more like Gold, although Gold has real uses so that is still a bit of a rough comparison.
Bitcoin does not support monetary policy though. If you read the Wikipedia article on the Gold standard, historians and economists seem to agree that the inflexibility to increase currency supply to stimulate the economy made the great depression much worse than it could have been without it.
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Don't forget that whole pesky "have to pay taxes to the state in their chosen currency under threat of the state monopoly on violence" thing. It is somewhat touched on in your first sentence, but at the end of the day, if you want to engage in productive economic activity in a particular jurisdiction, you must render what is Caesar's unto Caesar - and Caesar demands his preferred fiat.
Known as https://en.wikipedia.org/wiki/Chartalism , by the way. :) While these risks clearly _do_ apply to traditional currencies, I do think, as an investor, it's worth considering market cap (as a proxy for "social belief in") and history of stability. Bitcoin's market cap is probably (factoring in permanently lost coins) something like $750B, which makes it a bit smaller than, say, the Swiss franc, and its history…
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Or it could act as economic stimulus, as the exit dollars get invested in productive endeavours, rekt coiners have to get a job, and electricity and electronics become cheaper due to the capacity being freed from cryptomining.
You are assuming everyone can get out at the same time at price X. That’s not going to happen. Generally in crashes/drawdowns, 2/3 will see 1/3 of the price in liquidation.
>rekt coiners have to get a job
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It is being used to transfer money in other countries to avoid the fiat shit show.
“the fiat shit show” - aka taxes and other laws.
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Could it? How? I'm honestly curious because I don't see how Bitcoin could be useful.
It is being used to transfer money in other countries to avoid the fiat shit show.
it has its shitshow of its own - see $actual_crypto_exchange_busted
Earlier quoted context omitted.
Caveat, national currencies are secured with economic power, a system of law, culture, military power, etc etc. It is a bit different. They aren't perfect either but there is more supporting what people "think" they are worth here. Bitcoin has it own culture and history, but it is still a baby. I do think bitcoin is a bit more like Gold, although Gold has real uses so that is still a bit of a rough comparison.
Don't forget that whole pesky "have to pay taxes to the state in their chosen currency under threat of the state monopoly on violence" thing. It is somewhat touched on in your first sentence, but at the end of the day, if you want to engage in productive economic activity in a particular jurisdiction, you must render what is Caesar's unto Caesar - and Caesar demands his preferred fiat.
I know people hate hearing that, but it is the truth. I am frustrated with how high they are on some things, bad spending, etc. But at the end of the day look around at what we have built as a civilization. That is from the collective pooling of money to build the entire system.
Bitcoin just like any other currency, is worth exactly what people think it is worth. The entire financial system is basically a collective delusion of sorts. Any currency can become worthless as faith in it drops out.
It operates more like a stock than a currency and can be moved by any person/firm/entity that has a few billion dollars. I would venture a guess that the number of individuals using bitcoin to purchase goods/services is less than a couple percent of the total number of people that have bitcoin.