By that same logic, I should be able to pay for my groceries with Apple stocks by now.
Bitcoin isn't at that phase yet.
For any new money, it goes like this:
1. Store of value. 2. Medium of exchange. 3. Unit of account.
In that order. Cumulatively.
If you look for graphs showing the growth of merchants accepting bitcoin over time, you'll notice they're all out of date. That's because at some point after 2016 it stopped growing and people lost interest in this metric. This happened when the block size limit was reached: the result was higher transaction fees and unpredictable confirmation times. In 2018 it got so bad there was basically a civil war in the community about it and bitcoin cash forked. Today the average transaction fee is $19.
So I don't think we're on the path you envision. If bitcoin continues to be successful, I expect it will be used as an international settlement system by large corporations and financial institutions only.
Ignore Lightning Network's development at your own peril.
Increased and decreased interest are part of the normal market cycle, the chart of which I'm betting you don't know by heart.
You have to be extremely & wilfully ignorant to claim 'medium of exchange' is off the table, just now that PayPal & Mastercard are embracing cryptocurrencies.
But whatever, man. You don't wanna belong to the future's 1%, that's fine with me.
You're reading things into my comment that I didn't say. Note that I didn't claim that my opinion is more important than yours, nor did I claim that bitcoin will not be successful. It very well might be. I just pointed out some inconsistencies in the path to success that you envision. (Or rather, the path that Dan Held envisions, because your comment was an almost verbatim copy of what he recently said in a "What Bitcoin Did" podcast episode.)
> Ignore Lightning Network's development at your own peril.
Lightning will help with scaling, but it's not a silver bullet. To give one example: a lightning channel's state management involves composing precommitted transactions, which are not broadcast but can be used to unilaterally close a channel (see section 3.3.2 of the lightning paper[1]). That means the transaction fee also needs to be chosen in advance. That can be problematic when the transaction fees spike, because there is only a limited window for such a transaction to go through. If it takes too long to confirm, it will not be able to override an attempt by the other party to maliciously close the channel with outdated state.
> You have to be extremely & wilfully ignorant to claim 'medium of exchange' is off the table, just now that PayPal & Mastercard are embracing cryptocurrencies.
Paypal does not currently support using bitcoin as a medium of exchange. See Paypal's FAQ "Can I use Cryptocurrencies to pay or send money with PayPal?"[2].
Even if they do enable "sending bitcoin" within paypal in the future, I'm not sure we can say that that's bitcoin being used as a medium of exchange. The medium would be paypal, while bitcoin would act as a unit of account (numbers in paypal's database).
[1] https://lightning.network/lightning-network-paper.pdf
[2] https://www.paypal.com/us/smarthelp/article/cryptocurrency-o...
2. Like with every solution suggested in the bitcoin ecosystem, LN attracts a lot of FUD. The weakness you observe in LN seems to me like arguing in 1995 we'll never be able to stream movies via the Internet. "X Doesn't exist now, so it never will.". Present this argument to one of LN's creators, and they'd likely wipe it off the table.
The fact of the matter remains that any scaling solution has 2 minimum requirements:
A. It needs to be done off-chain. B. All transactions need to be verifiable from the genesis block.
LN satisfies these 2 conditions. If you'd design LN from the ground up, you'd probably end up with LN again. Just like you'd end up with bitcoin again, if you'd design that from the ground up. So these solutions will have to do.
3. Just because PayPal doesn't support this now, it doesn't mean they won't support it in the future. Matter of fact, it's fairly likely they will. Once again... "X Doesn't exist now, so it never will" is an inadequate argument.
I’m struggling to think of a currency that started as a store of value and then became a medium of exchange. Most currencies [1] started out worthless for good theoretical reasons. If they started valuable, they’d be subject to Gresham’s law and not transacted.
[1] The U.S. dollar, pounds Sterling, the Euro, the Swiss franc, money in the free banking era, Song Dynasty jiaozi, et cetera
But the part where it tries to explain why Bitcoin is the answer is laughable.
Almost as laughable as the part where he blames every societal ill from the degeneration of art and onwards on fiat currencies.
Argument irrelevant.
I'm not going to ban you right now because you've posted some good comments too, but if you keep posting comments like these ones we're going to have to. Please correct.
https://www.aclu.org/blog/privacy-technology/consumer-privac...
Bitcoin is a public ledger. It is AT BEST pseudonymous. At best.
Then I will make two other secret transactions with the CC and the BTC wallet. You can each then try to identify the targets and the sums spent in the secret transactions.
Whoever identifies gets some sum of money from the other. I'm happy to escrow for you.
> The finite supply is a feature, not a bug.
Finite supply means that a guy who mined a bunch of bitcoin in his dorm room in 2011 because the university gave him free electricity can move the price when he decides to sell.
State actors have good handle on violence. And then you better be on the same chain as they are, or it's jail time...
You can change the bitcoin source code to have more coins and deal out half to yourself first. That's the easy part.
But then comes the part where you have to convince the whole world that your chain is the one, true bitcoin.
Good luck with that.
And there's been growing demand for bitcoin for 12 years and counting.
It's deflationary by design. But by all means, stick to your government money.
Printer goes brrrrrrrrr.
I sit on it while it appreciates.
Number go up.
The reason why it is capable of increasing, is because the number is fixed. Inflation would outstrip its value, if it weren't.
Bitcoin is useful. It has organic support. When it comes to storing value, other coins do not matter (nearly as much). Just ask PayPal, Mastercard, Microstrategies, Tesla, JP Morgan, GrayScale, etc.
Every design decision comes with trade offs. All the right trade offs have been made. If you'd reinvent it from scratch, you'd end up with the exact same thing.
The only thing about bitcoin that sucks, is that nocoiners don't have any. And they won't have any until it's $1M.
Nobody wants to be the first. But everybody wants to be second.
It's important that you do it yourself. Because when I tell you it, it isn't going to land.
Your ideologies don't matter. The world won't let you force them onto it. The reality of the situation, is that all the big money believes bitcoin has a large role to play in the future of the world economy.
And this is true.
Screenshot this. Message me in 2030. Let's reevaluate.
It is impossible for BTC to become a medium of exchange without significant technical upgrades that the core developers have so far been hostile to.
Although it was a goal of the original bitcoin project (and continues to be for BCH and others), it is not a goal of the BTC community and it is incredibly unlikely that it will ever happen.
As for BTC vs BCH... the market has spoken: BTC is the one, true bitcoin.
I unironically think Dogecoin has a much higher chance than Bitcoin of being a legitimate and popular medium of exchange in the future, in part because the supply isn't capped.
I think cryptocurrency may drive a lot of commerce in the coming decades as an actual payment mechanism rather than a speculative security, but, if so, I don't think it'll be Bitcoin that wins that race. I suspect the value will still be fluctuating frequently and violently in ten years.
I'm no tax expert but I think the point the OP was making is businesses have more options for writing off lossess - they can drum up other things to apply a loss towards. Thus, a business can effectively write off more of the loss than an individual can.
These are rich people/companies putting non-existential amounts of money into something new in the off chance it pays off. Best case scenario they get even richer, worse case scenario they pay a lot less in taxes. Either way their lifestyle/needs will be met and the business will continue.
For the average individual: Best case scenario they get rich. Worst case scenario their investment goes to zero or close to it and they get a max 3k tax deduction on their taxable income. Their lifestyle/future savings could be greatly impacted by the loss, certainly far more than the businesses/rich people in question would suffer.
In any case, if a corporate makes an investment and loses the money, you are correct that this will lower the tax base and hence the total taxes paid, but that will of course only cover a small part of the loss.
I don't know the tax implications for individuals in the US investing in stocks, but in Sweden there's not much difference if you're a company or an individual, you'll still be able to deduct losses.
Finally, if a company invest a large part of their capital in Bitcoin and it goes to zero, that is just as catastrophic for the company as it would be for an individual, it just depends on how much of the "savings" were invested.
I was just opposing the "Rich people and businesses are getting into it! That means the value is bound to go up and makes it a good investment for me!" attitude I was seeing in the comments. The super rich and large corporations have disposable incomes and options that make buying bitcoin considerably less risky than it would be for the average retail investor.
Hell the risks are in Tesla's own SEC filing: https://www.sec.gov/Archives/edgar/data/1318605/000156459021...
"We hold and may acquire digital assets that may be subject to volatile market prices, impairment and unique risks of loss.
In January 2021, we updated our investment policy to provide us with more flexibility to further diversify and maximize returns on our cash that is not required to maintain adequate operating liquidity. As part of the policy, which was duly approved by the Audit Committee of our Board of Directors, we may invest a portion of such cash in certain alternative reserve assets including digital assets, gold bullion, gold exchange-traded funds and other assets as specified in the future. Thereafter, we invested an aggregate $1.50 billion in bitcoin under this policy and may acquire and hold digital assets from time to time or long-term. Moreover, we expect to begin accepting bitcoin as a form of payment for our products in the near future, subject to applicable laws and initially on a limited basis, which we may or may not liquidate upon receipt.
The prices of digital assets have been in the past and may continue to be highly volatile, including as a result of various associated risks and uncertainties. For example, the prevalence of such assets is a relatively recent trend, and their long-term adoption by investors, consumers and businesses is unpredictable. Moreover, their lack of a physical form, their reliance on technology for their creation, existence and transactional validation and their decentralization may subject their integrity to the threat of malicious attacks and technological obsolescence. Finally, the extent to which securities laws or other regulations apply or may apply in the future to such assets is unclear and may change in the future. If we hold digital assets and their values decrease relative to our purchase prices, our financial condition may be harmed.
Moreover, digital assets are currently considered indefinite-lived intangible assets under applicable accounting rules, meaning that any decrease in their fair values below our carrying values for such assets at any time subsequent to their acquisition will require us to recognize impairment charges, whereas we may make no upward revisions for any market price increases until a sale, which may adversely affect our operating results in any period in which such impairment occurs. Moreover, there is no guarantee that future changes in GAAP will not require us to change the way we account for digital assets held by us.
Finally, as intangible assets without centralized issuers or governing bodies, digital assets have been, and may in the future be, subject to security breaches, cyberattacks or other malicious activities, as well as human errors or computer malfunctions that may result in the loss or destruction of private keys needed to access such assets. While we intend to take all reasonable measures to secure any digital assets, if such threats are realized or the measures or controls we create or implement to secure our digital assets fail, it could result in a partial or total misappropriation or loss of our digital assets, and our financial condition and operating results may be harmed."
Add to that the fact that the people making the investment decisions at companies are not personally completely dependent on the outcome. Worst case scenario they can get another job.
Bitcoin can. And then it can move on to unit of account.
I worry that companies like PayPal are interested in btc precisely because they know it won't ever threaten them.
Thanks for playing.
Michael Saylor from Microstrategies: $1B.
Elon Musk from Tesla: $1.5B.
GrayScale: not sure how many dollars, but they own >550,000 bitcoins.
Big money is of the opinion that bitcoin is an excellent store of value.
Only a matter of time before it becomes a medium of exchange.
And later on, a unit of account.
By that time, you won't be asking yourself what 1 bitcoin is worth anymore.
Things will be priced in bitcoin. And those who have it, have it good.