A major legitimate use is wiring money internationally at a low cost.
Thoughts on Bitcoin
171–180 of 213 posts
Re: Thoughts on Bitcoin
#172Earlier quoted context omitted.
Because the value illegal actors find in Bitcoin isn't in its role as a currency, but rather in its role as an anonymous method to globally transfer wealth. Even if millions of people use Bitcoin for that use case, it doesn't mean Bitcoin will ever have staying power for the "reserve currency" use case.
The term for "a method to transfer wealth" is "currency". (And in fact, "currency" is used metaphorically to indicate methods of transferring anything at all.)
There's a large difference between a currency being used for anonymity and a currency being used for stability and trust (hence the use of "reserve" vs. "anonymous" in my post — I omitted "reserve" in the first sentence).
Re: Thoughts on Bitcoin
#173Earlier quoted context omitted.
I agree with the majority of your post, but I'm not convinced that inflation should be included in your list of bad things ("do you want inflation, meddling, and regulation?"). A moderate amount of inflation is a very good thing, and this isn't really even open to debate among economists. Its importance has been empirically and theoretically proven many times. Inflation is important because economics is all about cre…
Note that you are the one that calls my list bad, yet I specifically said that the uninformed should prefer this currency. Why should the uninformed prefer an inflationary currency? Because the uninformed are bad at accepting a decrease in demand of their market rate (their work performance would disproportionately decrease if given a 2% decrease in nominal wages). With that aside, let me give cover my complex though…
"We are living in aftermath of centuries of Keynesian policy, this is PART of the long run to which Keynes is dead in."
I don't know whether to laugh, or cry. Keynes was many things, but he was not a Time Lord.
We've been living with Keynesian policies for a tick under 70 years, which also has happened to correlate to the greatest wealth expansion in recorded history. It's a bit premature to point fingers as to why (or what has happened since the 1980's, which has caused middle class wages to stagnate).
Do keep in mind that Keynes was revolutionary because his ideas worked, even though they upended much of classical economics - they had (and continue to have) predictive power for how economies work, especially when interest rates are near-zero.
Re: Thoughts on Bitcoin
#174Re: Thoughts on Bitcoin
#175Earlier quoted context omitted.
Emotionally it does matter. Economically there's no difference between having the $2000 cash and buying 100BTC at $20 versus having 100BTC at $20 and choosing not to sell it. I would strongly recommend rereading skwirl's post and introspecting on the ways that emotions rather than the hard calculus of the market may be at influence. I say this as someone who is long on BTC (and purchased right before the last great c…
There absolutely is. You can't effectively spend bitcoin, except on the exchanges. You can't use bitcoin to buy anything. The only thing you can do is use USD to buy bitcoin and transfer the bitcoin, and have it transferred back into USD by the merchant.
When you exaggerate points like this you undermined the reasonable advice you're trying to give people.
Product and service availability for Bitcoin is very small, indeed, but it's not zero and the point you're trying to make is probably lost on anyone who already knows that you are either exaggerating or confused.
Re: Thoughts on Bitcoin
#176The following graph shows the estimated volume of transactions: https://blockchain.info/charts/estimated-transaction-volume?... You see immediately from the graph that the growth in number of transactions is relatively slow, considering all the media attention, and certainly far, far slower than the increase in the exchange rate. Note that this graph is not the same as the number of "legitimate transactions" mentione…
Unfortunately that graph is not terribly useful, even ignoring the "legitimate" filter— it both overstates transaction volume because lots of "non-transaction" events create transaction (e.g. consolidating wallets) and because it doesn't show transaction volumes of Bitcoin value which happen invisible inside systems (many Bitcoin wallet services will clear transactiosn between customers internally)
Re: Thoughts on Bitcoin
#177Earlier quoted context omitted.
The term for "a method to transfer wealth" is "currency". (And in fact, "currency" is used metaphorically to indicate methods of transferring anything at all.)
There's a large difference between a currency being used for anonymity and a currency being used for stability and trust (hence the use of "reserve" vs. "anonymous" in my post — I omitted "reserve" in the first sentence).
Hm? Currencies are primarily used as a means to store and exchange value. The other things are secondary features that you may use to do things like pick between two currencies.
Re: Thoughts on Bitcoin
#178Earlier quoted context omitted.
> Though it seems to be recovering somewhat. Ow. As with most investments, you need to think medium and long term. Barring some kind of final(!) crash, there isn't anywhere to go for BTC but up. Mainstream media and ordinary people are just now starting to talk about it. Stay with your investment, and don't sell before it at least doubled. If it crashes temporarily, that's fine too: chaos is a ladder. Within reasonab…
there isn't anywhere to go for BTC but up Why? BTC is, for our purposes, infinitely divisible. BTC is just as useful when it is worth $1, as when it is worth $1B. I believe the bitcoin network has value, but 1BTC doesn't hold any more intrinsic value than 0.1BTC. They both leverage the same network.
The argument usually hinges on simple counting: there are only 21 million possible bitcoins, and 21 million is nothing compared to the money supply of other currencies. Therefore, in the end (supposing bitcoin succeeds hugely), the exchange rate must be enormous.
So the difference between 1BTC and 0.1BTC is that there are significantly fewer of the former than the latter.
Re: Thoughts on Bitcoin
#179Earlier quoted context omitted.
I hope those 11k aren't all your savings. I have coins, am bullish long term, but buying bitcoin is speculation, and bitcoin can fall back to $0.01, even if I don't think it's likely.
It is indeed all my savings. But I was saving it anyway, so I won't be out in a doghouse if it vanishes. I guess I'm dumb, but at this stage in my life I'd rather have 9.89BTC than $11k. My theory is, everyone's expecting it to crash. So therefore it's more likely to do the opposite. Not much of a theory, but it seems to have been historically true.
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Re: Thoughts on Bitcoin
#180I'm going to buy a bitcoin after the bubble has passed. What do we think the real price is. Like $10 or $100? What's the projected bottom? I'm hoping for less than $10, because cheaper is better. The thought that I would never be able to afford an entire bitcoin has a negative psychological effect, which may be silly. What I like about alt-coins is how one can use that for games. Imagine making a game where a custom…
> a bitcoin-fork coin that has no value outside of the game, used for transactions. Seems like a cool idea to me anyway.
Unfortunately, without the right economic motivations the system isn't secure. Many altcoins have been exploited in the past. Perhaps as part of a game thats okay, but it might be hard to balance things so that the game didn't become entirely about exploiting its currency-thing.