As a modern eTulip bubble, it's a "success" for anyone who has made money speculating.
As a replacement for fiat money, it's an absolute disaster as a currency. Volatility and high transaction fees have killed any opportunity Bitcoin may have had to gain traction as a way to pay for anything besides drugs, ransomware, and evading currency controls.
Any talk about it being a replacement for fiat money is evading my point. I made the point that it was a plausible good store of value, not currency.
Oh, and by the way, there's nothing wrong with using bitcoin to pay for drugs, and this argument is akin to saying that the US Dollar is evil because it is so widely used in the drug trade that every $20 bill tests positive for cocaine (so I've heard.)
As for evading currency controls, aka economic oppression- that's one of the great uses of Bitcoin that will help improve people's lives world wide.
Finally regarding tulips, you can't have it both ways- you can't say price going up is proof it's a mania and price going down is proof it's a mania. Tulips were not a revolutionary new technology.
Anyone holding that much BTC, and facilitating that type of transaction will likely be subject to some form of regulatory scrutiny, sooner or later.
This only applies to Bitcoin, and as anyone can see even big operations like Coinbase trade in at least three difference crypto currencies.
>> - It's easy to store wealth in without being obvious to others.
Can you elaborate on exactly what benefits you propose this offers? And don't say tax evasion.
>> - It is easier to transport bitcoin than any significant amount of wealth
We've been able to send money all over the world for decades now, I can literally send my friend in New Zealand $50 using an app on my phone. Not sure how Bitcoin makes this any easier. Maybe it makes it a bit cheaper, assuming it's value doesn't plummet while your transfer is going through?
>> - It is easier to protect bitcoin than gold. Gold has to be guarded, Bitcoin can be split in to an n-of-m key and encrypted and replicated, securing it from fire, theft, etc.
This is a hard sell. Your choices for storing Bitcoin are basically keeping it in some sort of online wallet through an exchange or an application running somewhere, or you can store it offline ie a paper wallet. I don't see how this is any easier to secure than putting a pile of gold in a vault.
Bitcoin is probably even less secure for the average person - all it takes to hijack a wallet is a simple key logger. Once your wallet is gone it's not like you can contact your bank to get it back or have transactions reversed like you would with a normal account. Not to mention all the millions of USD worth of Bitcoin that have literally just been lost forever by people forgetting a password, tossing out old PC's etc.
It's not about sending $50, it's about sending $5,000,000.00. Which is an entirely different class of problem (paperwork, fees, process). Making that cheaper, faster, easier.
Yup, that's it, I'm investing!
>> Bitcoin is the very definition of a disruptive technology that will revolutionize society for the better and hackers are embracing it.
No, it's pretty much the definition of an e-tulip, and today has shown that it can and will be hugely affected by the actions of governments.
You do not seem to realize that BTC was "crashed" from $1,200 to around $800 back in January of this year. Was that also proof of whatever it is you're trying to claim?
You think that when the price goes up it is proof that bitcoin is a bubble and a mania... and that when price goes down it proves it's a bubble and a mania.
Also, the massive down voting that my post has gotten- despite it being a substantive contribution to the discussion-- with the uprooting your post has gotten, despite it being nothing but characterizations-- is actually very bullish for bitcoin. So long as even the "hackers" here don't get it, then that's proof it hasn't crossed the chasm and isn't in a bubble. (And your opposition is really all about the fact that bitcoin disproves several sacred economic theories.)
I'm frequently appalled at how "hackers" and "technologists" here and in my professional life have little factual indea of how Blockchain works, let alone something like Solidity or EVM.
I am utterly convinced that this is the future "App Store" that we are building on and the fact that so many programmers are oblivious is a sign for me to Keep Loading up on BTC, ETH...
It literally is Programmable Value and Transfer. It's absolutely slick.
People have such cognitive dissonance since everyone has been pretty much lied to their whole lives on the nature of Money and Credit. This kind of social and technical phenomenon requires people to reject a previous understanding they had (which in turn is offensive because that understanding goes to the core of their being -- earning your first allowance as a kid, hard work for your first paycheck, etc).
It's defensive for past Ego Investment. It's abhorrent that one could have bought $100 worth of something just a few years ago and would be a millionaire today.
Why would anyone want to use Bitcoin versus any of the newer, faster, more feature advanced alternative crypto coins like Monereo, Litecoin, Ethereum?
The two main forces that give Bitcoin more faith power than others are its age and how well known it is. The attack surface is small because of its simplicity.
I doubt the smart contract systems will be valuable until they build up a body of vetted (by time) law like Deleware has for startups.
And if it steadily goes up, "Deflationary Currencies Can't Work".
And if it stays steady, "The market cap is too low to take on the world's transactions while remaining stable."
Well it's true, the price of BTC rising steadily is not something which refutes that argument, particularly as BTC doesn't seemed to be used much as a currency.
What I can't find is the percentage of all above ground gold that is held in vaults & Jewelry vs captured in industrial uses.
That would be a better figure-- because it takes into account the centuries of accumulated financial gold (whereas jewelry and industrial gold is more likely to be recycled over time.)
Also, I would consider jewelry gold to be financial gold as well, because it is really almost the only store of wealth available to people at the lower socioeconomic levels.
but you have to realize, part of that 40% in investments makes sense because there is a fundamental non financial use case - jewelry. Someone will always buy gold at some price to make jewelry. So, that also drives investments. So bitcoin can't claim all of that 40%
There are about 11 million millionaires in America. There are only ever going to be 21 million bitcoins total. That means, even just among American millionaires, they will never be able to all own two bitcoins. How many will try to put %5-%10 of their net worth into bitcoin when they become convinced of its reliability?
Bitcoin has been under various forms of attack, by state level actors and by hackers for the past 8 years and it has done quite well. I am unaware of any software project that has captured this much value with this little vulnerability.
The value of all the gold in the world is about $8T. Bitcoin as a store of value has a lot of advantages over gold:
- Its terminal supply is absolutely fixed, unlike gold, and its rate of inflation is rapidly decreasing to below golds.
- It's easy to store wealth in without being obvious to others.
- It is easier to transport bitcoin than any significant amount of wealth
- It is easier to protect bitcoin than gold. Gold has to be guarded, Bitcoin can be split in to an n-of-m key and encrypted and replicated, securing it from fire, theft, etc.
So given all that, what is the ultimate intrinsic value of bitcoin? Lets say it is half that of gold. Then what's the intrinsic value of a single bitcoin?
That's something we can calculate: $4T / 21,000,000 = $190,476
Bitcoin is better than gold at gold's primary purpose. Yet its current value is much less than that of gold. This makes sense given that bitcoin has not yet crossed the chasm-- but gold is also something very rare for people to hold. People have a negative net worth and not a lot of them hold gold.
Bitcoin is the very definition of a disruptive technology that will revolutionize society for the better and hackers are embracing it. You should too.