Would be true if bitcoin was full premined, but it wasn‘t.
There are still 900 new bitcoins mined per day, and with an open source / patent free environment the space is a competitive market, the cost to produce one should tend towards the price of selling it (less so when the price rises quickly).
So how is at least a dollar lost (for every dollar won)?
For people speculating, there's always a buyer and a seller. If I buy $100 of Bitcoin from person A and then later sell that for $101 to person B, then I have gained a dollar. A dollar that A would have gotten had they held on, or B would have gotten had they bought in earlier. It's a zero sum game. Except that everybody involved is paying transaction fees, putting in otherwise-valuable time, and taking risk (e.g., of theft), so in reality it's a negative sum game.
That's very different than actual investing. If I put $100 into a friend's company, then they will hopefully use that money to create something more valuable than the total investment. I'll come out ahead, but so will my friend and my friend's customers. That's a positive-sum game.
You’re cherry picking your price analysis time period. Last year I could have said “BTC has trended down tremendously the last 2 years” and I’d have been right as well.
If you want to make the opposite argument, that it has a downward trend, you have to cherry pick a fairly small period.
You have to cherry-pick narrow enough time period to see bitcoin dropping in price.
If you pick sufficiently large time period bitcoin always grows. This screms 'investment'.
I'm not saying its bad, but its an extremely high risk investment so not suitable for the money you can't afford to lose. I've heard of many people withdrawing superannuation to put into crypto (or using credit) for example.
Volatility results from the fact that the markets have a very hard time pricing an asset (because the asset's properties are hard to understand and its future behavior is therefor hard to predict).
This results in the creation of noise on the price signal.
It does not mean the asset is inherently bad. It just reflects lack of knowledge.
https://miro.medium.com/max/1838/1*Ao2C0phpSfknHvorWl2a3Q.pn...
I've been banned from Paypal. I've run into many verification issues over the last decade with banks because I have no proof of residency once my driver's license expired.
Like physical cash, it doesn't need to be superior in all ways to be useful at all.
Every state I've lived in (13 so far) has an ID card that looks and acts exactly like a driver's license, with the only legal difference being that it is not valid for driving.
Unless you're not in America, in which case someone else can chime in.
I don't have any of that. But maybe you can appreciate that I don't want to have to jump through those hoops just to be able to send someone $100 digitally.
Surely you store fiat currency somewhere, and isn't there a "transfer money" button where you plug in an account number and institution and the money arrives shortly after?
The inability to make transfers immediately and without fees between accounts held at different banks is bizarre for those used to UK banking.
Isn't that trivial to do from a reporting point of view? Just export your wallet history and do a lookup on that day's price.
It's another reason why using a cryptocurrency is still a gigantic hassle in comparison to fiat.
But one of my points here is that, while I'm sure some people here are chomping at the bit to nail me with a gleeful "see? ironic!", I simply don't have to use Coinbase. I can, for example, exchange Bitcoin locally the same way I can trade USD for pesos with my roommate. I was SOL at one point when I was simultaneously banned from Paypal while my bank at the time spontaneously rejected further access to my own account, the two institutions I was depending on to operate abroad. It's what made me turn to Bitcoin, and I began considering how ridiculous the state of our financial status quo where I have precarious access to my own money.
I can appreciate that my outlier needs make it hard for people to relate to me the same way most people don't understand why an HNer cares about Linux when Windows works for them, but I think most people here are disappointingly eager to reject any possible upside of "digital cash". Even if its upsides are exceedingly niche for most people, that's not reason to dismiss them.
To me it's like reading an HN thread where everyone dismisses Purism's smartphone because Android and iPhone do the job for 99.9999% of people, and who the hell could possibly care about separating the CPU from cellular baseband? Or maybe they're claiming that only criminals would care about that. Well, that very few people are in a position to appreciate it has no basis on whether we deserve the option.
This is my last comment on this particular submission.
It is not difficult for most citizens in first world nations to keep and maintain a bank account.
Do you have a source for that?
It seems to me that asking for sources is a common technique for discrediting opinions on HN. It looks like a legitimate question but obviously if they had a source it would be a fact rather than an opinion.
If you are actually interested in how that opinion is formed ask a relevant question or point out what they are missing.
Personally I find that opinion entirely reasonable given that there are no problems I have that Bitcoin would solve better than the alternatives unless I was inclined to buy something online anonymously or to speculate on Bitcoin itself.
Just because a random guy barters bitcoins for goods/services, that by no means implies that bitcoin is anything close to money.
There is a very specific definition of what money is, and bitcoin's volatility alone rules it completely out.
It takes two to barter.
> treating it effectively like a foreign currency
They really aren't. They accept bitcoins in exchange for goods/services, just like we see in any barter system.
Calling bitcoins "foreign currency" is just a desperate attempt to hide the obvious consequences of it's volatility, which eliminates it's role as money, not only as a store of value but also as unit of account.
Each and every single random guy on the internet who wants to buy stuff with money cares about money, and the properties that allow something to work as money.
Specifically, properties like being stable in its value within the market, and reliable both as a means of deferred payments and meet debts.
Bitcoin, or any cryptocurrency, is nothing of the sort. Far from it.
For some random guys on the internet. yes. Some other guys are using it without waiting for it to be everything the previous system had. (deferred payments etc.).
No, it's not. It’s too volatile to be an efficient store of value or a useful unit of account for general purposes; it's got some use as a competitive medium of exchange for certain circumstances (but again not really with the generality of any major fiat currency.)
It's commodity that seems to (retrospectively, at least, and there is some reason to expect this to continue for the near future) have good investment performance if you are in a position to wait out down periods, which makes it nice as a component of an investment portfolio.
It's good at things that aren't the purpose of money, but mostly not good for things that are the purposes of money, except for a narrow subset of one of three major purposes of money.
Bitcoin is obviously not money, and among the many reasons the fact that it does not serve as a store of value nor a means to defer payments, which is a single requirement that comprised the very definition of money, is just one of them.
Nope. I don't buy things in crypto only because of the reporting burden. Every cup of coffee bought with crypto has to be reported on a tax return.
You should.
And then report every cup of coffe on your tax return.
And file on actual physical paper, preferably printed with a font that's hard to machine-read.
It's reported as a security - other, which is laid out like the stock trades 1099. Your taxable amount is the difference in price between what you paid for the currency and what you "sold" it for (both in USD).
If you're talking about the US, I think you're wrong: you need to declare all your hobby income, and since 2018, you can't deduct hobby expenses.
See e.g. https://www.creditkarma.com/tax/i/hobby-income-taxed https://turbotax.intuit.com/tax-tips/self-employment-taxes/4...
That's annoying. Would be nice if they didn't keep changing things around all the time.
I, for one, have and will continue to use it as a currency in some cases. I'm quite sure I'm not the only one.
HODL would not be the meme it was if the goal was to actually use bitcoin in day to day transactions.
There's an easy solution to that problem: spend BTC when you buy things, and then every week-end, buy it back to get rid of whatever monkey money (fiat) people gave you (salary,payments,etc...)
That seems like a lot of work, but it's easy to automate.
And if enough people do this, this will strengthen the BTC economy and weaken fiat, so you can feel good about yourself when you go to bed.
Ask the people who bought hundreds of millions of dollars (without inflation) of drugs on Silk Road, Empire Market, White House Market etc since 2013 until now. I am making up hundreds of millions based on the seized Bitcoins by the FBI, the real number probably exceeded Billions a long time ago already.
The WannaCry and other ransomware folks don't sit on their millions of dollars of extorted Monero/Bitcoin either. They buy cars and fancy things with them, and that's one reason many of them got arrested.
Few real world examples of scams against everyday folks:
https://www.youtube.com/results?search_query=canada+bitcoin+...
Safeway now has BTC ATMs and we we'll be able to drop "canada" from the query and get good results from the US soon.
Bitcoin has a potential to serve as that kind of saving “currency” a lot of people actually need.
If you on the other hand have a long saving window so you can tolerate huge swings in the price of the bitcoin (or other cryptocurrency) then the question arises why not diversify your investments like regular people and buy ETFs or other assets?
Maybe buying ETFs is harder than buying bitcoins, but in general the idea is (I assume) the same. However, what I feel most people are allured by with bitcoin is its random price movements where out of nowhere its price surges up and creates a total hysteria in the market.
I myself heavily dislike assets which price is mainly driven by emotional rationale and while bitcoin's idea may be good, I would not suggest anyone to put their savings in bitcoin. It would seem to encourage people to treat markets with magical thinking where the prices are set by otherworldly powers and not as tied to the revenue stream that is generated by the said asset.
So far over the course of my decade-ish long career most invoices are paid via fiat but actually my record sale was paid in Bitcoin. The client paid for approx 500 consulting hours in BTC (and is still a client to this day, paying for many more hours than that batch in subsequent purchases albeit sometimes in fiat).
I prefer Bitcoin over government fiat currency when doing large transactions like that because of the risk that a bank will freeze the funds or hold the transaction arbitrarily without warning and on either side of the equation; ie- you don't know if the party sending or receiving may be subject to the freeze.
I wouldn't necessarily say that most of its market cap is coming from people treating it like a currency. But I most definitely think it is effectively a currency in some places and in some special circumstances.
I take it that the point of the post is that, by and large, due to the fact that the blockchain is public and analyzed and mining is conceivably traceable to special purpose hardware, it's not for many practical purposes usable as a stateless, institution-free vehicle for transactions.
I'm not sure how to square the circle on this, but it certainly is a currency in some cases.
The site charges a small fee for the service of derisking the holdings.
This does seem to solve a real user pain point (risk and the complexity of hedging) and benefits from scale economies.
Yes, people are investing to speculate on its price, but they are also investing because it has a fixed supply that cannot be inflated away by governments.
Take a look at the U.S. M2 money supply YTD and the DXY and consider what happens next as more wealthy investors begin to recognize this advantage inherent in Bitcoin.
And the reason behind that is obvious. Something whose value may double in a month or whose value may halve within weeks is a terrible currency.
If I expect it’s value to increase then I would be a fool to spend it. If I expect it’s value to drop I would be a fool to accept it.
Cryptocurrencies are anything but currencies.