I think Bitcoin is similar to the gold standard, and its popularity lies in the mismatch of goals between government desires for fiat issuance and individuals for storing value.
Logically speaking it is irrelevant; instead of holding gold and calling it money an investor can still hold gold except it gets called an investment; but their holding will perform the same way because it is linked to the value of gold. The practical difference is tax treatment which gets complicated. Theoretically if I recall expected inflation/deflation in the currency doesn't change the economic equilibrium because everyone just factors it in to the interest rates and salary negotiations to keep the focus on real value.
And in execution any consistent % inflation/deflation of the money supply makes things weird and confusing because the measuring stick used to measure wealth keeps changing.
- Crypto enthusiasts who are infatuated with the technology or the math involved
- Anti-Fed Libertarian types who want to use something that isn't controlled by a government
- HFTs and speculators who either use it in part of their models or as a pump and dump vehicle
Some people also use it to buy illegal stuff, but most of them have moved onto Monero as the primary privacy-based cryptocurrency.
I agree that it attracts these people, but I can't figure out how they make the leap from "clever math" to "this has monetary value and I want in."
Or Saudi / Chinese / Russian business types that are trying to extract wealth and avoid the blowback of a regime change?
They probably fit under #2 but I certainly wouldn't call a lot of those libertarian in ideology or even in practice, just opportunists.
Whats the mcap of USD? Whats the mcap of EUR? Whats the mcap of Gold? Why does no one know exactly? Because It's irrelevant meaningless and basically impossible to know because of lost units and secret holdings (in case of gold)
Ofc people speculate with currencies but not the average joe, whos supposed to use it as a medium of exchange. And that's the whole point. Small fluctuations or small inflation doesn't matter for its use as medium of exchange.
The whole "global bitcoin economy" thing wasm't the topic of my post no clue why you tell me this. Also the price of btc is already determined by "global market force" if you wanna call it that way. although it has not much to do with any other market. It's just supply and demand that make the price.
Start here https://fred.stlouisfed.org/graph/?id=CURRSL,
and here
https://fredblog.stlouisfed.org/2014/09/how-much-money-is-th...
The currency component of USD doubles every 10 years.
If you trade fiat/precious metal or similar assets no chart will ever show the mcap of said asset. But somehow bitcoin and crypto included that value. The only obvious reason that this is a thing, seems to be because crypto space was created by people who have no clue about "money" or how irrelevant the mcap is for these assets.
Therefore,
"they do not include any lost money"
is irrelevant unless you believe people lose about half of their money over a single decade
"Not a single person on this planet does any educated decision based on that value. It's completely irrelevant. And that was my whole point."
That is false. Smartest people do take into account the fact that the market cap of USD doubles every decade. Printed money have to go somewhere, they do go in US stocks with the smallest loss on the way. Therefore, US stocks also double every decade. Therefore, it does not make sense to search for investments which deliver less than 8% a year since you are basically losing money relatively to the actual total amount.
>> If you trade fiat/precious metal or similar assets no chart will ever show the mcap of said asset.
Seems like you never traded in your life. First, look at Interactive Brokers, the most popular retail platform. For any stock you click, you see its market cap. Investor do invest differently depending on whether it is large cap or low cap. Google it, learn something. Even Yahoo Finance shows market cap.
You basically have no clue what you are talking about. Not need to reply, you are wasting my time. Cheers.
Also you totally bullshitting neither Interactive Brokers nor Yahoo Finance shows mcap for any fiat or precious metals. It however show mcap for cryto (Yahoo) but that doesn't make it a useful value. Its most probably just copied form CoinMarketCap.
>For any stock you click, you see its market cap.
Sure, but I said fiat/gold not stocks. The whole discussion started because people think the mcap of bitcoin somehow makes bitcoin or other cryptos comparable to stocks or fiat/gold. But that's nonsense because the value itself has no meaning for these assets.
Again, no none care that you think I have no clue. Bring arguments/sources for your claims or stop wasting everyone's time.
Other cryptocurrencies are working hard on scaling to the point of being workable currencies.
I don't think they abandoned the idea of it being a currency, I think they just have different ideas about how exactly to go about scaling it. The block size limit (and therefore the transactions per second limit) was raised 2x rather than significantly more because they don't think scaling onchain is a viable long term solution [0].
Lightning, and other second layer networks have always been discussed as the solution to this scaling problem, and while they are still very early, there's already a fair amount of usage. I work at a company that accepts Bitcoin, and as of today, > 90% of our transaction volume is via lightning.
[0] https://en.bitcoin.it/wiki/Block_size_limit_controversy#Argu...
Bitcoin is many things, but pinning it as a currency is very reductionist.
It can be used as a currency, but in its current form, it isn't very practical (lighting is aiming to, and will likely succeed in fixing that).
It is IMOH very much more useful for all the other use cases (eg store of value, doing away with government brain-hared management of fiat currencies, etc ...)
No practical value, no industrial value, no means to materially change the rate of production, nothing special at all except that it is rare, only a few people care about it, and its price will always depend primarily on the behavior of a very small number of market participants.
The power of a currency is the ability to trade it for goods and services. If that is no longer happening with Bitcoin it has morphed into something else entirely.