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Bitcoin Approaches $10,000 a piece

bbc.co.uk

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Re: Bitcoin Approaches $10,000 a piece

#31

Post by cs702 » 

  Current market capitalization in US dollars:
  
  Global M2 money supply                  over $90.0 trillion [a]
  US dollar M2 money supply                    $13.8 trillion [b]
  Euro M2 money supply                         $13.2 trillion [c]
  All coins and banknotes in circulation        $7.6 trillion [d]
  All gold ever mined                           $7.1 trillion [e]
  Bitcoin                                 under $0.2 trillion [f]
The world needs these money-like assets to function everyday. Otherwise, the global economy would ground to a halt.

Bitcoin has very different, unique characteristics compared to the other money-like assets on the list. For example, like gold, Bitcoin's continued existence doesn't depend on the good management of any national economy; however, unlike gold, bitcoins are digital so they can be encrypted, backed up, emailed, etc. Bitcoin is truly a new kind of money-like asset.

The trillion-dollar question is, to what extent does the world need a money-like asset with Bitcoin's unique characteristics to function in the 21st century?

[a] http://money.visualcapitalist.com/worlds-money-markets-one-v...

[b] https://fred.stlouisfed.org/series/M2

[c] http://sdw.ecb.europa.eu/reports.do?node=1000003501

[d] http://money.visualcapitalist.com/worlds-money-markets-one-v...

[e] https://www.fool.com/investing/2017/08/17/how-does-bitcoins-...

[f] https://coinmarketcap.com/currencies/bitcoin/

Re: Bitcoin Approaches $10,000 a piece

#32

Post by 0bsidian »

shp0ngle wrote: post #7

Nobody actually uses bitcoin for payment. There is more or less the same places where to spend it as there was 4, 5 years ago. And they all have about the same traffic, which is nearly zero. Most people only use it for speculation. This can't end well.

I'm going to repeat myself here, but please bear with me if you haven't heard this argument before.

I respectfully disagree with the idea that Bitcoin's killer-app is to be used as a currency for transactional purposes.

I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).

On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked).

Some use cases I can think off the top of my head:

(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.

(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.

(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.

(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.

This reminds me of Peter Thiel's recent words about Bitcoin: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."

Reference

[1]: https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...

Re: Bitcoin Approaches $10,000 a piece

#34

Post by jstanley »

0bsidian wrote: post #32
shp0ngle wrote: post #7

Nobody actually uses bitcoin for payment. There is more or less the same places where to spend it as there was 4, 5 years ago. And they all have about the same traffic, which is nearly zero. Most people only use it for speculation. This can't end well.

I'm going to repeat myself here, but please bear with me if you haven't heard this argument before. I respectfully disagree with the idea that Bitcoin's killer-app is to be used as a currency for transactional purposes. I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations). On the other hand, I can definitely…

> I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West

I can think of one: if you get paid in Bitcoin, having to buy some GBPs just so you can buy a coffee or a sandwich is a hassle.

Re: Bitcoin Approaches $10,000 a piece

#35

Post by Klathmon »

Udik wrote: post #24
jstanley wrote: post #13

Earlier quoted context omitted.

"Alternative" bitcoins aren't as good as real bitcoins in the same way that "Alternative" USDs aren't as good as real USDs.

Not true. USD is backed up by a State entity; bitcoin doesn't need one. An alternative USD needs an alternative guarantee of its value, an alternative bitcoin is as safe as the original one.

Not quite, since the "backing" of Bitcoin is in it's proof of work, an alternate won't have as much hashpower backing the work, so it won't have as much guarantee.

Re: Bitcoin Approaches $10,000 a piece

#36

Post by 189723234 »

0bsidian wrote: post #32
shp0ngle wrote: post #7

Nobody actually uses bitcoin for payment. There is more or less the same places where to spend it as there was 4, 5 years ago. And they all have about the same traffic, which is nearly zero. Most people only use it for speculation. This can't end well.

I'm going to repeat myself here, but please bear with me if you haven't heard this argument before. I respectfully disagree with the idea that Bitcoin's killer-app is to be used as a currency for transactional purposes. I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations). On the other hand, I can definitely…

>I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).

If you had the choice between a form of currency not controlled by a bunch of extremely corrupt entities that is much more convenient and cheaper in terms of storage and transactions, why would you use traditional money? I can't even transfer money to my friend overseas, it is too difficult.

Re: Bitcoin Approaches $10,000 a piece

#37

Post by sreyaNotfilc »

I feel its too late for me to buy in and to get any value out of Bitcoin. 3 years ago (when it was around $350 per coin) I asked my friend about buying one up and I received a pretty good reason not to jump in.

3 years later and it looked like I made the wrong choice. I don't have $10,000 just hanging around to buy into one whole coin.

Oh well...

Re: Bitcoin Approaches $10,000 a piece

#39

Post by brosirmandude »

sreyaNotfilc wrote: post #37

I feel its too late for me to buy in and to get any value out of Bitcoin. 3 years ago (when it was around $350 per coin) I asked my friend about buying one up and I received a pretty good reason not to jump in. 3 years later and it looked like I made the wrong choice. I don't have $10,000 just hanging around to buy into one whole coin. Oh well...

You don't have to buy a whole coin though.

Bitcoin can be broken up. You can buy 0.01 BTC for $100 if the price is $10k.

Re: Bitcoin Approaches $10,000 a piece

#40

Post by Cthulhu_ »

0bsidian wrote: post #32
shp0ngle wrote: post #7

Nobody actually uses bitcoin for payment. There is more or less the same places where to spend it as there was 4, 5 years ago. And they all have about the same traffic, which is nearly zero. Most people only use it for speculation. This can't end well.

I'm going to repeat myself here, but please bear with me if you haven't heard this argument before. I respectfully disagree with the idea that Bitcoin's killer-app is to be used as a currency for transactional purposes. I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations). On the other hand, I can definitely…

You forgot the use case where you're a drug dealer or other shady character and would like a means of transferring money internationally without relying on a regulated payment system. This group was responsible for the most payment-related bitcoin transfers a couple of years ago, at least until that exchange site was shut down. Also, ransomware.
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