Sending simple wires in the US takes hours.
Last time I tried to send significant funds from France to the UK, it took me a whole week of back and forth with the bank to complete all the AML/KYC paperwork.
Let's not even talk about how long it would take to move gold from one part of the world to another cf. https://www.bloomberg.com/news/articles/2020-04-30/iran-is-h...
You can buy or send bitcoin in seconds if you're not trying to do it on-chain, the same way you can do it with stocks and other assets. But definitive settlement of a bitcoin transaction is faster than pretty much any other asset.
What? No. It happens instantly at a protocol level. Practically, about thirty minutes. Most people don’t send and receive wires and so don’t choose bank accounts that prioritise them.
Practically speaking, Venmo and Apple Pay and Zelle are frictionless and instantaneous and more widely adopted than Bitcoin. For heavy users of international transfers, there are usually better solutions.
There are absolutely edge cases, and so a legitimate use case for a cryptocurrency there, but that’s not enough use to sustain Bitcoin’s value. To say nothing of the transactional motivation having been long since abandoned when inconvenient for the current store of value one.
Venmo and co aren't "real" transfers of asset, it's an update to a "permissioned" database. You can make immediate transfers on coinbase too but they could be reversed, or your account could get locked just as with venmo. It is just as easy to have banks hold everyone's bitcoin and instantaneously update a database so that feature is not an advantage of fiat over bitcoin.
Your bank is not set up for wires. Try Fidelity or First Republic or Silicon Valley Bank. Between 10 and 30 minutes from my hitting transfer to appearing in the recipient’s account. Exceptions are large wires which may require a phone call for verification, though I can usually turn that off if I wanted to.
But you always have to rely on a third party, transactions can be reversed, your funds can be locked etc... It's completely different from say, transferring actual bank notes, or actual gold bars or any kind of transaction where a third party is not needed, you can't be censored and it can't be reversed.
And again, everything you do with USD, you could do eventually do with bitcoin. If banks decide to hold bitcoin, they'll let you send bitcoin wires with all the issues associated with fiat wire. Bitcoin wires don't exist but they could. Permissionless, uncensorable, irreversible, under 1-hour USD transactions don't exist and they never will.
You would need to do the same paperwork with bitcoin.
I have UK and French bank accounts, transfers between them take seconds. Transfers from the French account to any other Eurozone account take seconds.
Joke is on you, though. Even Brazil now has instant wires (zero fees).
How much time would it take to convert, transfer to a bank account AND withdraw that same amount of money from Bitcoin to plain FIAT?
Both are probabilistic and highly unlikely.
A simple case of this happening with bitcoin is if the network fragmented. For example if a country had a firewall which temporarily blocked bitcoin. The country would continue slowly adding blocks which would likely revert when they reconnected back with the rest of the network.
If a country is behind a firewall, most likely, almost no new blocks will be mined because the hashrate difficulty will stay constant while the computational power behind the firewall will become too low. Blocks will be mined much more slowly for a period of time inversely proportional to the hashpower behind the firewall. Most likely, that chain will enter into a "mining death spiral".
While I agree with him that Bitcoin is a terrible currency, I think the "store of value" thing is nonsense as well. Stores of value need to have relatively stable value. Bitcoin is hugely volatile. That's great for speculation, but nobody with any sense would use it as the equivalent of a savings account.
I've come around to the idea. I don't hold any bitcoin anymore, and the best chance to get rich is gone, but I can see a future where something digital (hence fundamentally ethereal) acts as dense and largely unregulated store of value, for the people who need it. In the same way the drug trade currently uses artworks and commodities when it needs to move value across national boundaries, they can use hashes or something like that. Transaction costs to convert those from/to cash are actually higher and slower than bitcoin will likely ever be (i.e. a week or two, and several hundrend USDs, will still be acceptable).
We'll never pay taxes or coffees with bitcoin, or hold savings accounts, but it will still act as a commodity.
The second best time to plant a tree is today.
Such a strategy is dangerous when you're looking at a Ponzi scheme, or a pump and dump, or anything else that is designed to leave the late entrants as the bag holders.
I'm not saying that's what Bitcoin is, just that it's dangerous to be a late entrant to an investment and you should be more wary
(As a side note, this role for gold is clearly legacy: look at how little gold China stores, compared to their overall reserves.)
this not backing ?
> look at how little gold China stores
by metric tones china is on 6th place in world, what do you mean ?
> this not backing ?
It's the opposite. Originally you said "Gold Market is backed by Governments". This is governments being (partially) backed by gold.
>> look at how little gold China stores
> by metric tones china is on 6th place in world, what do you mean ?
Their economy is the largest in the world. How much smaller are their gold holdings, compared to those in first place?
So you're saying that Bitcoin isn't a store of value, but you speculate that it will be in the future.
Consider the classic store of value asset: gold. It's up 17% compared to a year ago, and down 11% compared to its peak last august. Sure, it's less volatile as bitcoin, but it's hugely more volatile compared to t-bills or a FDIC insured bank account. Does that mean gold also isn't a good store of value?
Gold is generally considered a last resort for the case where the US completely falls apart. But if that happens, I'm not sure gold is going to be much use - the global economy will be screwed enough that everybody suffers, gold or no gold.
If all civilisations collapse, yes. But if your civilisation collapses, a neutral store of value is easier to own than e.g. a portfolio of foreign bonds in a handful of offshore accounts.
Do you mean that very few people use gold as their only/primary store of value? I am sure many people have small amounts of their net worth in gold. Similarly I think Bitcoin is a promising technology but that doesn't mean I think users should allocate a significant percentage of their portfolio to it.
Even if gold isn't a means of currency, you can still trade for it because someone will be interested in buying it. After the collapse bonds and paper money will be worthless, but you can still trade gold for things.
Currency is whatever we use to avoid having to create 10-way exchanges. (Baker offers the cobbler 600 loafs off bread for a pair of shoes, but cobbler doesn't want that many because they will obviously go stale, so we need to bring in dozens of other people who need bread and can trade something else to the cobbler). Gold is a good choice for this, but is isn't the only possible choice.
Of course, signalling your importance and status is also necessary in primitive society, and wearing a little gold does the trick.
EDIT oh found another cool one, "Gold, with its malleability and incorruptibility, has also been used in dental work for over 3000 years. The Etruscans in the 7th century BCE used gold wire to fix in place substitute animal teeth."
I can think of two, but perhaps you can think of more.
First is the local society collapse because of war. Could happen to everyone, and while your armies might win in the long run, you might be forced to flee. At that point gold is useful because it is small enough to hide on your person, thus meaning you have a chance to get it out to a safer area. You might not be able to prove you own foreign bonds (or maybe you can, but it takes years of paperwork). Gold still has value to the rest of the world in this, so if you can get out with it that is a good thing.
A nuclear nation decides to end it all and shoot randomly targeted ICBMs everywhere. In this case the few percent of the world that survives by luck will need to start over. It is just your village, you can't travel far because of the wastelands surrounding you. Gold is useful because it can be formed into tools. Iron is better, but harder to form, and you may not have fuel to spare to heat it (proper heat treatment of steel is one of the things that makes iron useful). Gold also is pretty and so there will still be the jewelry aspects.
Neither of the above require the gold be currency, though it is a good choice for currency in general in the latter case when starting over. (not the only good choice) Scarcity is part of what has always made gold useful. You could get it in enough quantities that most travelers could carry their wealth around in that form (when not in the form of trade goods - traveler implies trader in those historical days)
Both of the above are long shots. I don't personally invest in gold because I find the risks of the above low enough that I don't bother to insurance against them.
After a few years things start to settle down. Trade with your neighbors becomes possible for some division of labor. However trade works better if there is a currency. Paper money is either degraded (the most common bills last a couple years), and the replacements are all obviously bad copies. What is needed is something that is easy to verify, that is hard to copy, has some intrinsic value, isn't so common that you need vast quantities, and something you are willing to trade. There are many choices for this, but gold is one of the better ones. Even if something other than gold is chosen, it is rare enough, and valuable enough (for good looks, and it is somewhat easy to for into useful shapes) so you can expect to find a market for your gold. Many of the things you can choose instead are either useless (computers without the entire power grid can't do anything), or so common that nobody will care (why would I want your iron when there are junk cars everywhere with plenty)
Note that in order for this to work you need to actually have the gold in hand. If you invest in gold without a safe to store it in, then it does you no good. Even if you can get to Fort Knox, whoever is there first won't recognize your claim to the gold inside.
You also need to consider inflation, thousands is a nest egg. millions is more than the local economy needs. People don't need to accept your gold, unless you are the local warlord, and then you don't need gold.
Gold has been used as a store of wealth since at least ancient times. So it’s not quite a fair comparison.
And the whole economy doesn’t need to collapse for an asset to be valuable. The reason Bitcoin is up is because people looking to maintain wealth are looking to broaden portfolios. S&P is overvalued for some, the US dollar is weak for some. Fed rates are still low, bond yields are low. If you take into account inflation those CDs and Money Markets you mention lose money. An extremely good CD will currently earn you 1% interest, meanwhile inflation will remove 2%.
So it doesn’t need to be nonvolatile for it to be seen as part of a portfolio of wealth management, and it definitely doesn’t need to only be a last resort against complete economic failure since almost nothing qualifies.
If you don’t already have a fully balanced and diversified portfolio, you may not need or be ready for Bitcoin yet... but that doesn’t mean there’s not trillions of dollars that are ready for it.
Or it could be like tulip bulbs, beanie babies, or International Postal Reply Coupons (what Charles Ponzi sold everybody on investing in). Or it might not be a new asset class at all. It's not like there's a finite supply of integers.
It doesn’t matter if there are a finite supply of integers. I’m guessing you are alluding to being able to “print more Bitcoin” by moving decimal places or changing code or some such. That’s probably not going to happen, since you’d have to convince 51% of Bitcoin holders to dilute their own stake, since that’s how the consensus algorithm works. And if you don’t, we’ll then you have a fork, and as we’ve seen with Bitcoin cash etc, those typically don’t hold value, because fundamentally the value of a store of wealth is that everyone agrees that it’s a store of wealth.
No one ever agreed or assumed beanie babies or tulips were stores of wealth. Those were speculative bubbles based on the assumption that tomorrow you could sell it for more.
Bitcoin doesn’t need to be worth more tomorrow to make it valuable. It simply needs to hold wealth in a convenient, transferable, counterfeit proof manner that’s also not easily manipulated. And it does all of those things very very well. Ethereum likewise stores value, and also permits useful decentralized finance systems that also provide for storage and transfer of wealth.
If you told dollar holders 100 years ago, that the money in their pocket would only be good based on the good faith of the US Federal Reserve they’d look at you cock eyed, because back then the dollar was gold backed. To the average joe, that gave them confidence in its value.
And don’t get me wrong I’m not a gold bug that thinks we should go back to the gold standard. Just the opposite. Instead what the US did was brilliant. They simply said “trust” “believe” that the dollar is valuable and will remain valuable.
And it’s been incredibly successful, again because it comes down to faith in the ability to hold wealth and have others respond in kind when transferring that asset.
So do you believe the US dollar will hold value over the next 20 years? If you base it on the word of the government then that’s not as different as the the word of millions of Bitcoin miners. (Democratic consensus) If you base it instead on the value of the underlying economy using the dollar as a wealth exchange medium, well then again, Bitcoin currently does 87 billion USD worth of transactions per day.
So it should be pretty clear that it’s incredibly different than tulips or beanie babies. If it’s not clear, I’d research a little more about the concepts of wealth historically, along with macro economics and monetary policies the world over.
https://en.m.wikipedia.org/wiki/Wealth
https://en.m.wikipedia.org/wiki/Store_of_value
If you think Bitcoin is an odd thing to believe in to store value and wealth, check out this island that uses giant stones...
https://www.npr.org/sections/money/2011/02/15/131934618/the-...
Bitcoin is also a speculative bubble. It has no use value. It is not in any way living up to its original goal as electronic cash. (Contrast transaction volume and adoption with MPesa, for example.) Its main practical uses are speculation and some financial crime.
Well, I left one out. It's also great for market manipulation. The recent runup has been driven by "the largest fraud since Madoff": https://www.kalzumeus.com/2019/10/28/tether-and-bitfinex/
Eventually, like all frauds, you run out of dumb new money and accounting chicanery. That day will come: https://davidgerard.co.uk/blockchain/2020/12/13/tether-is-to...
I only have a notion that ignorance is ignorant.
I can back up all my arguments with facts, information, research study and understanding.
Your articles on Tether is just red herring fallacy since your original argument has no merit.
As for Bitcoins uses, there are many. For instance I recently acquired large amounts of bullion at a steep discount via bitcoin. Why? Because it’s cheaper and less trouble transaction wise for the bullion seller. All above board. All taxes reported. Nothing criminal.
Defi loans allow collateralization of crypto assets. People in business are currently using them to secure extremely large multimillion dollar notes in minutes to do business transactions. I’ve been in the rooms when these occurred. Again all above board, all tax legal.
Simply using banks for certain situations are a pain.
Clearly you’ve never experienced such situations, hence why it seems a scam to you.
I guess you’re smarter than me and Elon Musk. I would absolutely believe it if you had facts and arguments that didn’t have logical fallacies.
There’s political arguments on both sides of the crypto currency debate. Your arguments seem politically motivated. I have no political agenda.
The discovery of fission changed the world. There was no keeping it under wraps or going backwards after the physics were discovered.
The ability to transfer and store wealth online via blockchain and consensus algorithms will exists from now on. There’s no going back. It’s simply a fact of information science and physics.
Remember this discussion. Think on it when in 30 year’s cryptocurrency is considered a norm, and when multiple governments finally transition to digital currencies.
Or you know... you can quote more non relevant, poorly educated sources to support a point you wish for. It’s like the old timers laughing that the internet was just a play thing in the 90s... Now if the internet went down it would be a national emergency.
Oh... and here’s an actual intelligent article from a fairly respected source rather than some random blogger. Here’s the important point
“Many people think that bitcoin is a bubble, and that's predicted on the concept that bitcoin has no value. But there's reason to believe that that just isn't true. By definition, bitcoin is scarce. And the cryptocurrency may have utility as a superior way to store and exchange wealth.”
Edit: I also hope you understand that this debate is an intellectual exercise, not a personal issue. So I am somewhat annoyed that you would call my comments tedious :). No one should accept ignorance. And disagreement is wonderful, but it should be an educated discourse. Silent downvoting or flagging of things that are unpleasant isn’t the way forward. I tend to only downvote comments that are provably factually incorrect, make comments that are based on ignorance or misunderstanding, non constructive, or outright hostile.
If you truly are interested in open understanding, it’s not a bad thing to say “I am ignorant on this subject.” In the past when I have said that, I have learned a lot.
Cryptocurrency and Bitcoin causes emotions or brings up political divides for a lot of people... I can only begin to guess at the reasons why. But burying your head in the sand or listening to the “bubble” crowd chorus is doing yourself a disservice.
That you think a pseudo-debate is a good idea explains why you're flooding the zone with nonsense, condescension, and a refusal to even look at what you're saying and how you're saying it. Which is indeed tedious. Maybe you don't have any better ways to spend your time, but I sure do.
Damn... guess that Socrates was a dominance driven asshole then huh?
It’s only “dominance driven” if you take it personally. If instead you realize that strong conversations are a way to elucidate clear logical thought and arguments on both sides, then you see it as a tool for understanding.
> condescension, and a refusal to even look at what you're saying and how you're saying it
That’s not me. I’ve been adding to the discussion with fact, and discourse. You’re the one who has quickly taken to dismissive ad hominem attacks.
> Maybe you don't have any better ways to spend your time, but I sure do
Says the man who’s cultivated a karma of 38876. You clearly spend wayyyyyyy more time on here than I do. Again, you turned this personal quickly... why?
Look if your so badly triggered by a discussion on HN about bitcoins, to the point where your thinking this is condescending and dominance driven on my half then do yourself a favor and read this book or at least the article.
The Coddling of the American Mind: How Good Intention... https://www.amazon.com/dp/0735224897/ref=cm_sw_r_sms_awdb_im...
https://www.theatlantic.com/magazine/archive/2015/09/the-cod...
And maybe that’s condescending? Or maybe I’m trying to actually help (which I am).
You don’t know me... I don’t know you. But I recognize areas when I know less than someone else and I open myself up to it. Did your teachers in school “condescend to you”?
Reread all the discussions and you’ll simply see that I attempted to shine information and fact where there was ignorance.
Not every human being has equal knowledge and understanding of all fact. I know for a fact I have a greater understanding of this than you do.
And when you post ignorant things, or post conspiracy theories then I respond in kind. And yes, I do have better things to do. But honestly it pains me there is so much ignorance, and conspiracy stuff online rather, retweeted and reposted without thought, than actual facts.
If enough people sat down with those Trump supporters who marched on the capital and actually condescended to them for a bit to get them to face reality and fact, you could get through to some of them. Not all. But some. And that’s the start of change.
So which kind of person are you. Do you take criticism and seek more knowledge, or will you come away from this never questioning yourself and only seeing condescension in differing opinions?
Good luck, and if you believe it or not, I do wish you the best.
Usually constructive comments would get some actual criticism or disagreement rather than just downvotes.
I get it... BTC sour grapes just downvote. Same thing happened when I called out the GME fiasco when that was $300 a share.
But pro tip so you’re not sour grapes in the future. Put aside you’re egos, and instead of downvoting things here that scare you or you simply disagree with. Try using HN as a learning tool.
If you disagree with something.. comment first... then downvote. Discourse, discussion, debate. Those are the paths to learning and understanding.
What’s the benefit of downvoting rather than posting evidence to counter my posts.
Since you don’t it means you don’t have relevant facts and instead seem to quell posts you disagree with.
That is a fact. I don’t “believe” the sky is blue due to light scattering ... I know it. And it doesn’t require “a line to the mind of God”. It’s called science, knowledge... education.
It is a fact that cryptocurrencies have value as a store of wealth and are not ponzi schemes.
Just because you don’t understand it doesn’t make it a belief on my end. Just like if you don’t understand why the sky is blue from how light interacts with nitrogen molecules, doesn’t make it a belief on my end.
We could debate the current price of Bitcoin. We could debate whether it’s in a bubble (which happens all the time in legitimate asset classes like real estate or the stock market). We could debate if the fact that only certain sectors of the population have access is detrimental. We could even discuss if Tether is pumping up Bitcoin through manipulation. (My opinion, since I and everyone currently have very limited data on it, is that it is, but ultimately to a very small degree). And tether in the way you brought it up, is a red herring here because one lone bad player doesn’t negate everything.
But dismissing cryptocurrencies as Ponzi schemes, tulips or beanie babies is simply ignorant and without fact. If there were facts that could support that conclusion, that would be worthy to discuss, but “extraordinary claims require extraordinary evidence”
Here are facts: COVID is a pandemic. Bitcoin is a store of value.
Here are opinions based on fact: The COVID pandemic has caused enormous suffering. Bitcoin is a good store of value.
Here are beliefs: COVID is humanity’s punishment. Bitcoin is going to ruin the world.
Here are prejudices: COVID is a caused by 5G or Chinese conspiracy. Bitcoin is a Ponzi scheme.
More reading on fact, belief, opinions etc:
https://writing.colostate.edu/guides/teaching/co300man/pop12...
https://chem.tufts.edu/answersinscience/relativityofwrong.ht...
In places like India, gold jewelry has a prominent cultural value (a part of most wedding rituals, for example). So its desired and even required no matter its price - though demand is, I imagine, pretty elastic. The volatility of gold prices competes with 8% inflation,
Even if gold is volatile, it competes favorably in an investment environment where 1) cash inflates at 8% a year 2) private banks can often be risky, with many going bankrupt over the years 3) the average person has no access to US T-bills 4) gold can be melted any time to make jewelry anew, so one can always be fashionable (keeping the use-value of the material fresh) 5) gold can be pawned in emergencies, in practically every town 6) where access to digital banking may be spotty, transporting jewelry is an easy way to transport wealth
A store of value has many attributes that make it a good store of value - ubiquity, tradability, use-value, transportability, its value relative to the other options in the investment environment.
> Does that mean gold also isn't a good store of value?
You answered your own question. There's a good reason to prefer FDIC insurance. If your fashion choices require you to avoid fiat currency, that's on you.
Few financially savvy entities keep gold as a store of value.
Y is like X to a lesser degree, and no it's not as good as Z, but does that mean Y is bad? We're only talking about X and no it's not a good store of value given the other options.
Maybe we should all just acknowledge that money is made up and any security it provides depends on tons of interconnected systems made up of people largely unaccountable to the layman.
Edit: I think the mistake people make is trying to create stability on unstable ground.
Land.
But yeah, fair point. It's pretty much the only 99% safe asset.
Is it just that the system of storage will have Ongoing operational cost like a vault has ongoing costs to protect gold?
Has anyone modeled what these costs might look like?
How are these questions still being asked, and more amazingly, still being upvoted? First off, there will not be a time when "all the bitcoins are mined". Mining rewards are on a geometric curve that approaches 21 million but never touches it. Second, transaction fees also go to miners, so even when mining emissions are negligible, transaction fees will keep the miners incentivized to keep mining.
This is all pretty much in the intro of the whitepaper, and the first thing you should learn if you spend 5 minutes looking into this technology.
These questions are still being asked because people like you still spout the wrong answers. There will be a time when "all the bitcoins are mined" - its in the source[0].
[0]: https://github.com/bitcoin/bitcoin/blob/master/src/validatio...
On larger timescales, this isn't really that much of an issue.
Volatility is also trending downwards. The bigger it gets, the more stable it becomes.
To be clear, there is no mechanism, logic or reason (at least revealed to me) why this would be true. Vice versa, increased amount of trading typically increases volatility.
Define amount. If you mean number of trades, then the effect is decreased standard deviation if the average trade is smaller as a percentage of total market capitalisation. That seems completely logical.
See: pretty much every study in to HFT.
If that's the case, then bitcoin owners will only dump their holdings if a) they fear that the bitcoin network is about to collapse for some reason or b) they need to put the value stored in those bitcoins to use.
The mechanism is that you get flows hitting both sides simultaneously (56 buyers vs 44 sellers) that tend to cancel out, instead of a single player (3 buyers vs 1 seller or vice versa) dominating the flow.
BTC volatility will go down as adoption goes up.
I don't think it's at all clear that Bitcoin adoption will go up. It's never been useful as a currency for most people, and Tesla aside, merchant adoption has been in retreat for years. KYC/AML laws are reducing its utility for financial crime. Its only real advantage is in speculation and market manipulation. But both of those depend on volatility.
Large cap stocks weren't engineered for stability, but they're lower tail-risk than mid cap stocks, which are lower tail-risk than small cap stocks, and so on.
The same phenomenon has been broadly true across all markets over all of human history, and the underlying mechanism (heterogeneous flows) is well understood and rather intuitive.
Whether or not BTC adoption increases is not relevant to what I was saying. My only claim is that volatility will decrease if adoption increases, counter to the misplaced scepticism of the post I was replying to
If BTC adoption decreases instead, then volatility should increase, ceteris paribus.
Perhaps not the most fun thing to hedge against, but just like buying life insurance it's a good idea.
In extreme meltdown scenarios, you can broadcast Bitcoin over FM radio, the data rates are literally low enough. Spending bitcoin requires sending _hundreds_ of bytes, which again is small enough that you can drop down to very robust and simple technologies if you need to.
Bitcoin has no "wasteful energy requirement". It adjusts the amount of hashing you need to do based on the amount of competition that's doing hashing. If 80% of the hashrate suddenly disappears, Bitcoin runs slowly for a couple of weeks and then significantly drops the hashrate requirements for the network to progress.
For efficiency, many Bitcoin mining farms are established within a couple hundred meters of the power plants producing the electricity, which means that Bitcoin also generally has minimal dependence on the global electricity grid, even though it consumes an enormous amount of electricity.
Bitcoin's robustness to societal meltdowns is one of the things that makes it really interesting.
Bitcoin can't even build a significant user base now. Approximately nobody buys anything with it. Compared with debit cards or cash or mobile money systems like MPesa, it's a rounding error. If it's not better than any of the existing payment systems, it's not going to get better in some sort of prepper-fantasy collapse.
also, volatility only matters if you sell it. if you're holding as a store of value, then you've done extremely well over the long term.
For example, inflation of a given currency is measured using a basket of goods and services, not other currencies.
"1 Tulip bulb will always be 1 tulip bulb. It's just that people but them with a bunch of different currencies and all the other currencies have been really volatile relative to tulips (though not relative to one another)."
“I see Bitcoin as ultimately becoming a reserve currency for banks, playing much the same role as gold did in the early days of banking. Banks could issue digital cash with greater anonymity and lighter weight, more efficient transactions.” - Hal Finney (2010)
The money in your bank account is a liability of the bank, it's not cash.
The thing you transact with is digital, liquid and fungible. In what sense is it not cash?
If you receive physical cash, it's in your control.
Now if only that cash could not be inflated as much as it can.
Why would (a) my bank want to do this, and (b) why would I want my bank to do this?
(a) providing cash level privacy to customers, which (b) they should probably value more than they do.
you've got nothing to hide, right?
That is true for gold as well. (Ofc not 'nobody', just 'almost nobody'.)
Interestingly, I went and looked up what the price of gold would actually be if it was solely used for industrial processes, and it's hard to actually figure out: it's speculated on a lot, but world gold demand in 2019 was 4355.7t. Of that, 48.5% was for the jewelery industry, and 7.48% for technology - the rest accounted for by investment. So industrially world demand for gold for productive or decorative uses is about 2439.2 tons (as of 2019), whereas mining production in that year was about 3,300 tons.
So about 45% of world gold demand is essentially from financial speculators. To figure out pricing you'd have to really get into the current mining economics for technological use...
https://www.statista.com/statistics/299609/gold-demand-by-in... https://www.statista.com/statistics/264628/world-mine-produc... https://www.gold.org/about-gold/gold-supply
Not even close. Gold is a tangible psychical asset, a finite resource on Earth that can not only make valuables you can wear or leave as heirloom but is also a really good heat-reflector and electricity conductor needed in anything from semiconductors and precision electronics to supercars and satellites. Without it, the global electronics industry would suffer terribly.
It seems more likely that people conflict zones would be happy to accept gold (with the assumption it will be valuable in the future/in more stable areas) than bitcoins that require electricity, stable internet and tons of disk space.
The problem with Bitcoin is it's not a physical thing at the end of the day: nobody mints jewellery out of bitcoin.
A golden chain with a gold-plated USB key containing a Bitcoin wallet might have a considerable bling factor though. :)
That is the case for countless things. Is a corporation a real thing or a belief? Where is the physical entity Facebook or the physical entity Apple? Is it the people working for them? Their logo? Their contracts? It's all that and a collective belief in an abstract entity. That's true for fiat or states too, even if that belief can be enforced through e.g. army, that doesn't change the fact that's is a collective belief in something that has no material reality.
If your state demands your taxes be paid in FIAT, no matter what you wan't, you'll be paying in FIAT (or fined, or in jail, or depending on the circunstances maybe dead).
When the taxman comes knocking on their door, do you think this person will escape by saying "sorry, I don't have fiat available to pay for the taxes, come back next year!"? No, the taxman will respond by either seizing their assets or forcing the person to liquidate into fiat.
What makes Bitcoin (or crypto) different in that regard?
bitcoin acts more like a commodity than fiat. Bitcoin is backed by the laws of mathematics, rather than laws of nature (which is the case for gold).
Your claim that bitcoin is not fiat because it's backed by the laws of mathematics makes as much sense as claiming that the dollar is not fiat because it's backed by the printing press. This is not what 'backed' means in the context of money.
It only has value as long as people believe it has value.
The caveat of course is that all of the things I listed have SOME more inherent value, but that is NOT the major contributor to their actual trading prices. Gold is not THAT useful. Neither is owning a billionth of a company.
That was my point. Any "real" value in most of these things is dwarfed by social delusion value.
Same with AAPL stock. Sure, I can pay ~$130 per share to technically own a fraction of Apple. And what good does that do for me? What's the dividends on AAPL? Will my vote EVER actually influence the company? I could spend $130 on canned beans and rice and likely get far more utility than I'd get from the ACTUAL share of AAPL. On the other hand, I'll probably be able to sell my AAPL share to the next sucker for more than $130. THAT'S the real reason 99.99% of us are invested in the stock market.
And, like it or not, bitcoin DOES have uses. It's still a little bit cheaper to send money via bitcoin than via Western Union, AFAIK. It's easy to pay for something online without giving your personal info to PayPal or the person who you are paying. Are those minor conveniences worth $40k? Hell no. But that's also my point. It's all crap.
In Apple’s case, you’d now have to pay 136 dollars in order to be entitled to 3.7 dollars of their annual earnings, corresponding to a current annual return rate of 2.7%. That’s better than any bank accounts, and it will most likely rise faster than inflation.
This is how the stock market works and how people value mature companies.
People will only pay for the next Apple product as long as they believe it provides value to them. It's all the same. Perception is king.
So issuing more shares would not change the value of existing shares, at least in the short term.
Never mind the fact that the shareholders would have to make this decision, and that Apple has long been doing the exact opposite.
if the existing majority shareholders chose to do this, then it will happen, but otherwise, this can't happen. And i don't see a situation where the existing shareholders would willingly choose to do this dilution for no reason.
That is not true. There are only 1.5 billion active Apple devices. I myself own 4 of those. Everyone else I know that has an Apple device also has multiple. I'm pretty sure the average Apple customer owns more than 1.5 devices. Thus there can't be over a billion of these people.
One of those illusions is more powerful and sustainable than the other
It was made exclusively by software engineers and miners. Miners get to vote based on their wealth. I don't consider that to be "a democratic process". There is no guarantee of enfranchisement. Some people get far far far more votes than others. It is more like a council of aristocrats.
Government spending in the US is 35% of the whole GDP.
Try to argue with your tax office, that it is an illusion/religion.
Why is BTC worth more than BCH?
We could discuss the fact that BTC might be overpriced or underpriced, nobody really knows. But that it's going to go up in value (in terms of purchasing power) in the long term is, black swan events aside, almost a certainty because of its engineered stock to flow.
Scarcity is real whether it's physical or digital (as we've seen with art, collectibles or more recently NFTs). Gold is a good store of value because of historically predictable scarcity but it's not predictable with certainty. Bitcoin is. We'll know exactly how many bitcoins are in circulation 10 minutes, 10 days, 10 or even 100 years from now. If anything many will be lost, which will contribute to its scarcity.
Will Bitcoin be replaced by something else in the future? Almost certainly. But let's not forget that unbacked cash has been around for just half a century. Even if Bitcoin is replaced by something 50, 100 years from now that's plenty of time for a couple of generations to use it as a store of value (and payment system).
Price is the interaction of supply and demand, and there is no particular reason to believe that people will be more willing to pay over $45k to update ledgers to indicate possession of a particular alphanumeric string in a couple of decades' time than they are now.
> there is no particular reason to believe that people will be more willing to pay over $45k to update ledgers to indicate possession of a particular alphanumeric string in a couple of decades' time than they are now
Absolutely. Nobody can know with certainty what will happen but if you compare Bitcoin with something like gold you immediately realize that Bitcoin is better in any possible way. There is literally no reason to think that Bitcoin won't replace gold in terms of market capitalization (except for the 7.5% actually used in manufacturing) [1].
[0] https://trends.google.com/trends/explore?date=today%205-y&ge...
[1] https://www.statista.com/statistics/299609/gold-demand-by-in...
Again, this is cargo-cult nonsense. Gold does not take the electricity resources of a large country to render it secure and make transactions possible. People cannot vote for a greater gold supply or fork gold, or create an alternative gold which lacks the need to use the electricity resources of a small country to secure it but is in every other respect functionally identical. Gold is pretty to look at and can be made into jewellery, not intrinsically worthless. Gold's price might be pushed higher than that intrinsic value by interest in its use as a store of value, but it's driven by millenia of desire to possess gold as a status symbol and currency substitute across a vast array of cultures, not a 12 year bull run propped up by counterfeit dollars and increasingly unrealistic claims that it will replace currency. There is literally no reason to believe that Bitcoin will ever 'replace gold in terms of market capitalization'
Except it does [0].
> Gold is pretty to look at and can be made into jewellery, not intrinsically worthless.
The first argument is laughable, the second is simply incorrect. Oil is intrinsically worthless. It's worth something only if you can turn it into fuel, plastic or some other product for which there is demand. Same goes for gold.
And although it's true that you can turn a piece of gold into a piece of jewelry that piece of jewelry will decrease in value over time unless it gains intangible value because of its history. Try buying a gold necklace and selling it the next day at the same value.
Nothing has "intrinsic" value. All value is relative.
[0] https://medium.com/@hillpot/bitcoin-vs-gold-which-hurts-the-....
That energy is used in production, not securing the existing stock of gold. With the very significant consequence for gold's "store of value" role that if environmental activists succeed in curtailing gold mining, gold owners would see their gold go up in value, not transactions becoming incredibly difficult and prone to fraud and a price crash. (But FWIW I'm not saying that gold mining to use as a "store of value" isn't also wasteful)
> It's worth something only if you can turn it into fuel, plastic or some other product for which there is demand. Same goes for gold.
I'm sorry to hear you find the aesthetic preferences of virtually every culture in history and the role they have played in promoting gold as a symbol of wealth laughable. You'd be surprised how much harder it is to enthuse them about the aesthetic properties of Bitcoins though.
And no, oil or gold is not "intrinsically worthless" because it is possible to use oil or gold for purposes other than exchange, and thus people value them for those use cases independently of beliefs about their future price.
> And although it's true that you can turn a piece of gold into a piece of jewelry that piece of jewelry will decrease in value over time unless it gains intangible value because of its history. Try buying a gold necklace and selling it the next day at the same value.
And yet gold necklaces of a given design are invariably more scarce in supply than Bitcoin! Almost like the demand side of the equation actually matters! Luckily, people do not buy gold necklaces solely because they believe gold necklaces will go up in price, and are not motivated to sell them as soon as they fear the price will fall in future. The same does not apply to Bitcoins, because unlike Bitcoins, people hold necklaces for the intrinsic pleasure of having a shiny necklace.
Safes and transportation equipment have to be built too. And we already have layer 2 infrastructure that minimizes the amount of energy spent to secure transactions on chain. It needs a lot of work, sure, but it's not unfeasible for Bitcoin to use a fraction of the energy used today, at some point.
Furthermore mining gold requires mining equipment to use whatever source of energy is nearby or ship expensive tanks of fuel and/or batteries. With Bitcoin you could set up a mining rig where there's a source of energy that would otherwise be left unused. Meaning we could be using a lot of renewable resources that would otherwise be wasted to create and exchange value.
> I'm sorry to hear you find the aesthetic preferences of virtually every culture in history and the role they have played in promoting gold as a symbol of wealth laughable.
I don't and you took what I said out of context. Of course aesthetic properties are important. But quartz is arguably "prettier" than gold in most cultures. Gold is scarcer. That's why only considering the aesthetics is laughable.
> And yet gold necklaces of a given design are invariably more scarce in supply than Bitcoin!
Gold necklaces of a certain brand. Not any custom designed necklace. It's an important distinction. A brand is a very real and important source of intangible value. And a brand can be related to a company's IP or to other less predictable events (think Banksy).
> because unlike Bitcoins, people hold necklaces for the intrinsic pleasure of having a shiny necklace.
You seem to be unaware of how many people hold Bitcoin just because they like doing so (think GME and WSB). A strong niche of Bitcoin holders has ties with libertarianism and, therefore, attributes a non-zero intangible value to it in terms of it being an instrument against totalitarianism and governments in general.
Because gold will be worthless and useless if it is not possible to continue using as much energy as Argentina on a daily basis to build and maintain safes and Securicor vans?
> Meaning we could be using a lot of renewable resources that would otherwise be wasted to create and exchange value.
Because the world is famously short of use cases and storage media for electrical power? As I already pointed out, none of the energy used to mine new gold is essential (or even remotely helpful) to securing and transacting with the existing gold supply, gold mining being energy use is something of a moot point when considering possible advantages of holding gold instead.
> I don't and you took what I said out of context Of course aesthetic properties are important. But quartz is arguably "prettier" than gold in most cultures. Gold is scarcer. That's why only considering the aesthetics is laughable.
At no point have I even hinted at considering only the aesthetics, and no good faith reading of my arguments would conclude I did. I did, after all, include the clause "price is the interaction of supply and demand" in my opening post.
I noted that aesthetics were a factor creating demand for gold independently from its perceived resale value. You summarily dismissed this as "laughable". There was nothing substantive for me to "take out of context", but I'm glad you now agree that the intrinsic aesthetic properties of gold are important.
> Gold necklaces of a certain brand. Not any custom designed necklace. It's an important distinction
Yes. I am aware that brands exist. Sometimes brands even produce limited editions so "we'll know exactly how many [necklaces] are in circulation 10 minutes, 10 days, 10 or even 100 years from now", but even this doesn't guarantee their gold necklaces retain their value. The fact that scarcity of particular designs often does not make them more useful as a store of value than the less scarce raw material supports my argument not yours. Second hand necklace preferences are fickle, and financial instrument preferences even more so.
> You seem to be unaware of how many people hold Bitcoin just because they like doing so (think GME and WSB)
How's GME performed as a store of value since WSB pumped? It's just as scarce as it was 10 days ago, but apparently not guaranteed to go up after all...
And come to think of it, the "terms of it being an instrument against totalitarianism and governments in general" are not independent from BTCs potential for future exchange use. Certainly neither as independent from future use nor as widespread as people taking pleasure from things' intrinsic shininess.
I was simply responding to what you said earlier:
> The same does not apply to Bitcoins, because unlike Bitcoins, people hold necklaces for the intrinsic pleasure of having a shiny necklace.
It does, instead, apply.
You clearly don't understand what "intrinsic value" means if you believe this. The very fact it can be fabricated into something of value gives it some intrinsic value.
That's a plain contradiction. Oil is valuable because there is demand for products manufactured with it. In a world where there's no demand for gasoline, plastic or any other derivative of oil the "intrinsic value" of oil is zero, which proves there is no such thing as intrinsic value that isn't relative to a market.
Just to be clear we're discussing commodities and not company stocks, for which there is a very specific definition of "intrinsic value", according to fundamental analysis at least.
I'm pretty sure you're the one who's confused, but ok.
Until then, it's potentially a great investment in today's climate (especially if you don't care about the climate).
Most things valuable nowadays are strings of characters. It's not the byte sequence that's valuable, it's what it represents. Bitcoin is, conceptually speaking, an asset that is orders of magnitude better than most existing financial instruments and commodities. The fact that it's implemented using bits instead of atoms is completely irrelevant.
I really don't understand this urge of breaking down anything digital into its fundamental units to try and diminish its value. It's the equivalent of evaluating anything in the physical world as "just a bunch of atoms".
Because in the good times, people think these things are great investments. But as soon as things go south they look at what they have from a different perspective. Something with some intrinsic value (e.g. a "bunch of atoms" that can be eaten or lived in) is likely to be much easier to rationalise holding on to in that scenario, rather than something that's only worth something due to consensus by a bunch of strangers.
And that's the risk - it doesn't matter if as an individual you see great potential. If everyone else disagrees, gets scared and sells, then BTC could be battered.
Also the "live in" is a big misconception. Real estate doesn't increase in value. What does is the land on top of which it sits. A house depreciates over time exactly like a car (prefabs on rented land are a great example of that).
The only question that matters is: is Bitcoin better than commodity X? Where X can be gold, silver, oil or whatever else. And if the answer is yes there's no reason to believe it wouldn't take over X in terms of market capitalization (and, therefore, value).
No. The only question that matters is will people collectively continue to agree that it's worth something, lacking any intrinsic value?
If interest rates go up and people need to call in their assets to repay their debts, what do you think will happen? Would people rather lose their houses or their bitcoins?
I think people will dump stocks and risky "assets" like BTC and take flight into cash with some percentage in traditional safe havens with a proven track record (like gold) until things settle down. This is exactly what happened a year ago. There's no reason in my mind to believe anything would change regarding BTC's status now - I think it'll be dumped like it was last year. It may recover faster (I'd certainly buy it for a heavy discount), but I just don't buy the "store of value", "digital gold" argument.
It's an early-stage speculative asset IMO - let's not pretend it's a stable, low-risk store of value.
> A house depreciates over time
Tell that to people unable to buy because house prices have shot up. Property can also generate a good rental income - yield obviously dependent on the price paid. BTC doesn't provide any such perpetuity.
1. There is no such thing as "intrinsic value" and I explained clearly why in a different reply to your comment.
2. What goes up is the value of land, not houses. If houses themselves were valuable movable homes would also increase in value. They don't. The reason why land goes up in value is that (residential) land is scarce.
3. Gold isn't a safe haven because of its track record (in fact gold is relatively volatile [0] and if you had bought gold in 1980 you'd have lost money today, adjusted to inflation), it's considered a safe haven because it's the only commodity that has a historically predictable stock to flow and can (and normally does) act as a hedge against inflation. Bitcoin does that and more.
> It's an early-stage speculative asset IMO
So was gold in its early stages as a store of value. So is any valuable company's stock in the first few months after IPO. Speculation is uncorrelated with the lack of fundamental valuable features.
At this point I'm not sure your intent is to try to understand more about Bitcoin (or economy, for that matter) but rather to force a narrative that isn't at all obvious, unlike what you're trying to imply. And I'm not saying you're wrong, rather that you're unable to corroborate your statements with data and facts.
"And for that reason, I'm out".
[0] https://www.macrotrends.net/1333/historical-gold-prices-100-...
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd be grateful.
> Be kind. Don't be snarky.
> Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.
And I disagree with:
> You've crossed noticeably into that here [emphasis mine]
I've only done that in 2 comments towards the same user who also behaved similarly towards me. All my other comments have been polite, constructive and filled with references.
How about 5 years?
I can't give you an actual estimate of how long it will take for Bitcoin to lose its market share but I can confidently say it will take decades. At very least until it replaces a good chunk of gold's market cap.
Moreover, since technology is accelerating ever faster, five years from now is a lot longer than five years starting from 1980.
Maybe it's just me, but it's clear to me that markets crashed, the shockwave just hasn't been felt by everyone yet.
Once it does, we're likely to see a depression at some point [1].
Since Bitcoin is famously volatile I'd bet that once there's a scare, people who've pumped the price up to the current highs will abandon it in droves. After all, there's a huge difference in risk between buying in <$5k vs ~$30-50k
It won't for small transactions. Buying a car or a house with BTC could still be viable in the future.
Bitcoin might not be as good as the UK, but you have to understand that the consumer US financial system remains stuck in the 1980s.
You can do it from home for a negligible fee ($0-$3) if you're ok with ACH instead.
(Same-day ACH has a max of $100k, though it used to be $25k. Next-day ACH is something like $100M, though your bank likely has a lower limit.)
There are title deeds and tax rolls. In many jurisdictions you have obligations like building codes that need to be inspected and an owner needs to be held to account. If you need privacy, you have to set up shell companies to act as the legal owner, not hide the payment from your bank or government.
Speaking of showing the source of the money, if you bought my house from me with bitcoin, I would have to speak to a lawyer about not running afoul of money-laundering regulations. And no, I won’t take the internet’s word for it that somehow, those laws only pertain to fiat currency.
Something tells me that the cost of fighting my government in court would far exceed the value of my home regardless of whether I was technically in the right not to fill out all those same forms.
Big issues, big risks, but maybe you have big balls too... I personally don't feel so self assured about myself.
Maybe by "international" you mean something else, but at least in the EU(and EEA and UK) transfers can be incredibly quick.
Even if it's less useful than, say, access to SEPA, it'd have to be 14x less valuable to break even (again, presuming internet access available to everyone, which isn't a thing yet).
People think that's a feature until they don't.
Not in the EU they don't. A SEPA transfer takes max 1 business day and is usually free. More info: https://www.gbm.hsbc.com/solutions/global-liquidity-and-cash...
Well, almost -- they do always feature cool progress bars as the money is transferred.
The idea that somehow they'll let you buy something with Bitcoin without requiring the same level of disclosure is a complete fantasy.
I'm sure it's possible, although almost certainly very much not really liked by your solicitor!
I must point out I know a couple people who did that in Hungary in the last ten years, just because it seemed absolutely insane to me (cheques don't exist here, either..).
I am reasonably sure this isn't that common though, and the government still tracks the transaction :)
"I don't want them to know." is therefore a valid reason.
Admittedly, my experience with BTC is limited so please enlighten me if I have this wrong. That’s not a sarcastic request. I’m being genuine.
BTC is a pump and dump play.
10+ years is a pretty long con, that satoshi is one patient fraudster.
It is the people who have latched on as "bitcoin evangelists" and are recruiting more people into the network to get the price to go up. Classic Ponzi scheme.
If you want to talk about previous conversations around this, the ones I have had always end in people believing that decentralization or cryptography are magical words that solve all kinds of problems without creating new ones. I have never invested in currency so the price doesn't matter to me. I assume it will go up proportional to the number of people that can be convinced to invest.
> > ..."bitcoin evangelists" and are recruiting more people into the network to get the price to go up. Classic Ponzi scheme.
> > ...this doesn't perfectly fit with existing definitions of other scams.
> I said that the enthusiasts are activity looking to expand the number of people investing.
I wonder. Are you aware of how far your characterization of the situation has shifted within the same thread?
evangelist -> enthusiast
recruiting -> expanding
Ponzi scheme/scam -> investment
Have you changed your position, or simply softened your language as a result of finding your position indefensible? If the former, congrats; if the latter, maybe think on that a little more.
> ...always end in people believing that decentralization or cryptography are magical words...
Well, you claimed earlier that off chain transactions were functionally equivalent, from the perspective of the money transfer service, to credit cards. When challenged, you adjusted that to debit cards - which is also not even close to being true. Even if you were talking about it from the perspective of the end user, or merchant, you'd still be very wrong. So you clearly don't know much about the stuff you've expressed strong opinions on, and that means your estimates of others' opinions on the same carry no weight.
> ...the price doesn't matter to me.
You might want that to be true, but it rarely works out that way. Opportunity cost can do funny things to people, like compel them to construct elaborate coping mechanisms in defense of their ego. Sometimes that looks like a confidently stated, but ill-informed, opinion that crumbles in the face of any pushback. Like I said, I've been here a long time and I've seen it all. There is one guy I worked with years ago who asked me about bitcoin but took no action. I only pay attention to the price toward the end of the year, when working on taxes. But without fail if I get a call from him then I know that bitcoin has just had a major selloff. The funny thing is that he is totally unaware of the behavior, it isn't as if he aggressively gloats - but he always brings up bitcoin, and then I don't hear from him again until the next selloff.
can you elaborate on this?
>a need for always-on nodes
AFAIK if you're not a payment hub (ie. you want to route other people's payments) you don't need to be always online.
Haviong trouble finding it now, but google "lightning network routing problems" and you'll get a lot of results. IIRC the fundamental issue boils down to a hard mathematical problem about node traversal that is not yet solved. I am having trouble recalling the name right now, apologies.
> AFAIK if you're not a payment hub (ie. you want to route other people's payments) you don't need to be always online.
There have been ways that a counterparty can close a channel in their favour if you aren't online. Perhaps this has been fixed by now.
AFAIK the fix is to have a service (or multiple) stay online for you, and I believe it could be done without requiring access to your private keys. If your counterparty broadcasts a stale transaction that's in their favor, your service will broadcast a newer transaction that reverts it.
Especially for large transactions internationally, where my bank asks me+the other party to fees like $30 and it takes 3 days if everything goes well.
In comparison with that, BTC for those years, gave me on average 40 minutes and $1 fee.
This is thirty times better than what my bank provides.
Otherwise, it’s like getting options in a startup and spending them on pizza.
1. when it is expensive or difficult to send money to places like Vietnam, post-soviet countries, Iran. 2. some saving in case the shit hits the fan and I will have to survive for a couple of months without TransferWise, Revolut.
It won't, it's just a speculative asset.
So… there's that.
The government issues USD, it doesn't back it.
The government implicitly guarantees that the USD can be used to purchase goods and services. Take a dollar bill. It has "For all debts, public and private". This is a guarantee by the government. If the USD gets outcompeted in the US, then that would make the government a liar, and thus it would use its power to make that not happen.
The government guarantees the value of fiat USD. The government has congress, police, military and nuclear weapons to back that guarantee.
Not only is it a "promise" by the government. It's also in its best interest to maintain control of monetary policy.
And also the people want it, so…
That's not backing, there's nothing that the government guarantees I am able to exchange for $1.
> Take a dollar bill. It has "For all debts, public and private".
That has a long list of exceptions. But regardless, that's not backing.
> The government guarantees the value of fiat USD.
No it doesn't, the value of USD fluctuates every minute, and goes down significantly over time.
Once upon a time you could take your dollars to the government and exchange it for a fixed amount of gold. That was backing.
(serious honest question)
The US government DOES guarantee that the USD has value. It's not something that they cannot fail at, but they do guarantee it. Cryptocurrency has no guarantee at all that it has value.
If your definition of "backing" is that you are guaranteed to be able to exchange it for something else, then cryptocurrency is truly backed by nothing, making the statement "backed by math" commonly used by bitcoin nerds complete nonsense.
And if laws are not obeyed that's a police matter.
Concretely if stores stop taking fiat, and only cryptocurrency, to the point where it affects the economy, then you should expect laws preventing that. If that doesn't help then you should expect to see arrests happening.
Governments have the legal and physical ability to enforce monetary policy. Bitcoin nuts who say that "fiat currency is backed by nothing" are delusional. Several currencies are ultimately backed by nuclear weapons.
So in other words cryptocurrencies are only allowed to the extent that they don't overthrow the whole system. And overthrowing the whole system was the whole point, right? (well, that and buy heroin and make ransomware)
Like any technology, it works or it doesn't, and people will use the one that works the best for them if they have a choice. For instance people in some countries use their local currency for daily purchases, but store their wealth in instruments that are valued in dollars, euro's, etc. Some people will break the laws of their own countries to lay their hands on those dollars or euro's.
Money is speculative inasmuch as its value is still relative to other things such as stocks, gold, and bitcoins. Holding dollars instead of gold on any given day is a speculation. In a relatively free economy, there's no such thing as opting out of speculation.
Bitcoins are unique inasmuch as they are designed to exist without any deliberate purpose being imposed on them. The only way a government can manipulate the value of bitcoins, that I can think of, is to subsidize the electricity for bitcoin mining.
Are you sending it over the network, or to someone else within a website? (eg: binance, coinbase; doesn't need to be an exchange)
Do you track your transactions later? Do they get confirmed? How many confirmations does a website need to count it? How long does that take?
I would expect a low-fee transaction to eventually either expire or go through. I don't know what timeframe that might take: higher fee typically means higher priority as I've understood it. I can't imagine it'd keep your $ in limbo forever, but who knows. If you haven't used it in a long time, I understand that the network is much more congested these days.
Wake up, this question was reasonable in 2010, maybe 2015. :) Today no serious person is still thinking it would be usable :)
This is pretty much the way money worked in the 19th century, just with gold instead of BTC. Nobody physically carried or transferred gold to buy a beer. They just used bank notes that were backed by a trusted intermediary holding the physical asset. It might make sense for a bank, or even a very wealthy person, to pay the cost of physically transferring the hard asset. But most just used IOUs that were backed by the underlying hard asset.
$5,793,513,475.00 // WBTC (Bitcoin on Ethereum)
$49,173,964.59 // Lightning
Nakamoto instilled within the Block's raw data: "The Times 03/Jan/2009 Chancellor on brink of second bailout for banks."
"Your money isn't safe in banks", and a healthy dose of making it easier to launder money.
Bitcoin just provides a hedge.
IMO a niche use though.
Not really sure what’s point is for Tesla but my guess its speculative for them, with an attempt to get some additional value on cash they are starting to swim in now...
Speculation and free marketing I expect
The transaction cost depends on the size of the transaction and the congestion in the mempool, the cost can be set by any sender depending on the urgency of the transaction.
I don't think these are widely used in practice yet, but I might be wrong.
Also, it's still faster and cheaper than an international SWIFT.
Small transactions can be done on sidechains and other chains.
Also while it is decentralized, the reality of how it is used is very much not. The typical use case is buying and selling it via an exchange, not much else. Depending on where you live you have to reveal more information about yourself to "just buy bitcoin" than you have to when opening a bank account.
This isn't so different from any network.
In fact the original design for Bitcoin assumed larger blocks in the future, so it is perhaps a more accurate description to say that Bitcoin Cash is the "original" Bitcoin, and Bitcoin Core is a fork with an altered (small blocks) design.
Bitcoin will not function as a currency due to it's high volatility. For a more usable currency look at DAI, USDT, and USDC which are stable coins pegged to the dollar. DAI is collateralized with on chain assets where USDT and USDC are collateralized with real life assets which are mainly regular USD.
With these issues in addition to the high power consumption, how will Bitcoin become a usable currency?