I agree that for someone living in US or EU there's no much point using BTC.

Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa.

That's a good point. Too many people propose individualist solutions to social problems, and all their "solution" would do is make the social problem worse.

I think that stems often stems from an overzealous faith in free markets, which leads to a distorted idea that individual self interest factored over all of society always results in social benefits, so you only need to consider things from the perspective of an individual (which is also far more familiar to most people). Sometimes individual self interest does lead to social benefits, but often it doesn't.

It's like a genetic/ML algorithm that is optimizing for a cost function. If your cost function is awful your algorithm will be awful but that's not an argument in favor of getting rid of cost functions entirely.

Is it so laughable that whichever one achieves the best results for its users will be the one to establish both market and political dominance? Is letting such a competition play out via the value of their respective currencies any better than traditional means of resolving this kind of conflict (i.e. war)?

I'm not saying I have ultimate faith in the market to do the right thing--it frequently doesn't. But it sounds like you're saying that it can't.

Granted, BTC's political system involves allocating power based on who can waste the most energy--so it's a pretty laughable alternative to existing governments--but in principle I don't see why markets can't mediate the rise and fall political systems in a way that roughly mirrors the way that political systems mediate the rise and fall of companies.

There's that saying: - Those who make peaceful revolution impossible make violent revolution inevitable.

It seems to me that collectively changing whose currency we use based on their capacity for sound governance is the kind of peaceful revolution that we ought to strive for.

Already cryptocurrencies are implementing webs of trust to guard against this kind of thing (CirclesUBI). There are also things like MAD escrow (particl). And there's the old fashioned way, which is to get the community together and set up your own impromptu government.

I'm not saying that markets function well without readily available trust. But to say that they cease to exist in those contexts is surely taking it too far.

The value of these markets is itself decided through a free market.

Given a sufficient level of digitization, it's not hard to imagine how many kind of real world markets could be backed by Bitcoin-like systems.

Other forms of property ownership are much more fragile, and require a much more sophisticated legal system.

With a regular currency, the government can print more money and at least have a chance for things going back to normal once the currency has a chance to go back up in value. But with a currency that's not controlled, you won't get payed in worthless money (inflation), you just won't get payed at all! And instead of getting back your lost value if the currency rises in power, you'll have to hope the contract will be honored at a later date, or massively overload the legal system.

Bad actors are ostracized while good actors build followings, leading to reputation acting as an effective mechanism to find good actors to trade with, and incentivize people to become good actors.

In any case, when people are free to choose between government-recognized currency and non-governmental digital currency, they will choose the one that best suits each circumstance, leading to greater overall utility.

Cryptocurrency offers a much more accessible alternative to global payment systems to the people living in these countries.

Bitcoin solves none of these problems. Sure, it allows you to at least assume this risk, which your country otherwise doesn't, so it's not nothing. But it's at best a band-aid.

It also doesn't protect you in any way from your employer not paying your salary on time, from being wrongfully terminated, from not being able to get a loan, from business partners not paying their debts because they can't sell their own products etc. These are usually the problems that a non-functioning state and non-functioning economy face.

Cryptocurrencies can be used in person too.

With respect to eCommerce, EBay worked extremely well simply because of reviews. Not because of laws. And yes, people came to trust eBay, which was due to its faithful fulfilment of its obligations as a platform steward, not due to regulatory requirements imposed on it.

Imo, there's nothing better to secure your assets better than some form of monopoly on the law, or a monopoly on violence, or even better a combination of the two. This is also why billionaire classes simply consider crypto a wealth store asset and not a secure store of assets.

But leaders pay a political price for instituting draconian enforcement measures, while their country pays an economic price, which makes them less likely. It's one thing to send armed agents to storm the homes of executives of a large private bank to shake down the bank. It's another to do it against end-users at a scale where it becomes effective.

You may be right about the most secure form of property. Many don't have access to jurisdictions that can offer people in their income class that kind of security of property. For them, I think in some situations cryptocurrency can be a very secure form of property comparatively speaking. Cryptocurrency can be thought of as a poor man's offshore bank account, literally speaking.

Actually I didn't mean monopoly on the law and monopoly of violence that way. I meant that billionaires invest a lot of cash into politics and personal security (legal and otherwise) for good reason. It would be very hard for a politician to go head to head against a billionaire donor, since he would just donate to the other guy the next time. Similarly, they get to influence a lot of things including who might head the city's police force or what policies to implement on a regional or national level. It's the same thing everywhere, whether you're in the Indian or Pakistani badlands, the heart of the EU or smack in the middle of NYC or SF.

I agree with crypto being the poor man's offshore, but a poor man wouldn't need an offshore. Not to mention, the barrier to open an offshore account is much less than the cost of BTC right now.

Yes true.

>>I agree with crypto being the poor man's offshore, but a poor man wouldn't need an offshore. Not to mention, the barrier to open an offshore account is much less than the cost of BTC right now.

Offshore bank accounts are very costly and difficult to get. They are also not that secure, considering how many have given up on financial privacy in the face of the warrantless-financial-mass-surveillance aka AML push by the dominant political powers, and leaks like the Panama Papers.

I don't think the political price is as high as you think, and armed agents don't have to storm the homes of end-users at scale. All they have to do is storm enough homes discourage people by making it clear the risk is real, and everyone internalizes the rules.

If cryptocurrency is contraband, it's the worse kind of contraband because it advertises that you use it to the authorities through easily monitored channels (since you have to connect to identifiable internet services to use it).

I suspect the scale of enforcement needed to discourage widespread usage would be very large, and incur political and economic costs that are prohibitive. That's corroborated by the fact that the USD circulates widely in countries suffering high inflation, despite it being in the best interest of the elite of these countries for people to only use the national currency.

>>If cryptocurrency is contraband, it's the worse kind of contraband because it advertises that you use it to the authorities through easily monitored channels (since you have to connect to identifiable internet services to use it).

Only if public access to strong encryption is prohibited, and there are economic costs associated with a country doing that.

What you mean to say: people will reinvent laws and governance.

Governments run themselves but until recently, economies didn't. Now that there are two memes (besides violence) that are each independently capable of mediating coersion on a global scale, we can play them against each other and select for the one we like best.

Is that more true for you using a gun than it is for police using a gun?

With individuals making those decisions, the decisions will be made at much lower cost, and this will result in lower quality of decisions.

not unrelated is the disk storage the block chain will eventually require, now ZFS and storage density arms races make sense

I have yet to see proper governance last long enough to be of any note and worse governance tends to quickly flip to favor the powerful.

Of course Hong Kong is now different, but that's not because the government changed its policies, but there is a different government in power.

Singapore had the benefit of a trade port, but it kept importance as such and expanded into becoming a important financial center as well as punching well over its weight in terms of innovation. They have invested in education and provide a stable environment for business.

Still, Hong Kong being different now is because the powerful (China) changed the government to favor themselves. This is actually an example of government falling to powerful interests in short order.

Singapore has as bad or worse of income inequality as the US, and I wouldn't say the US is well governed. https://en.wikipedia.org/wiki/List_of_countries_by_income_eq...

Still, I don't want to take equality as a primary metric since I think inequality to some degree is natural.

Singapore is however a infamously repressive regime as mentioned by ardy42

Also, IIRC, they both benefited from being trade gateways into the PRC economy, especially when it was more closed than it is now.

A market is useless if it doesn't actually allocate goods and labor efficiently and in the way people want.

A low positive inflation effectively makes all prices that are denominated in a fixed amount of the currency slowly lower. This helps the economy - ie, people and companies acting in the economy - deal with changes more easily, since their contracted prices are going down. It also avoids the problem with deflation: Keeping money to spend in the future makes more sense to an individual, thus money velocity goes down, thus less things happen (and all actors earn less.)

That's also why increasing the money supply for crises is good: It allows the same activity to go on, even if each unit of currency moves less. People can get paid the same even if everybody save up money. If there's a fixed amount of currency, they can't, since the currency that would be used to pay them is now bound up in their savings.

This helps the people who have capital and is paid for by the people who only have wages. I am a person that only has a wage, so I choose bitcoin.

We don’t even need to make up hypothetical examples. We have a live one in Greece. The Greek citizens went through this exact ordeal for the exact reason you stated. They couldn’t print EUR and the ECB wouldn’t extent monetary support to Greek government.

https://www.ft.com/content/33b0a48c-ff7e-11de-8f53-00144feab...

You can't have a stable monetary union without a fiscal capacity. The inevitable debt crisis in the Euro-zone are stopped by the ECB buying debt in the secondary markets.

The hypocrisy of the system is obvious to however takes the time to see how it works.

1. Countries that have natural resources can raise capital when they need to, either by selling/taxing rights to those resources or by selling nationalized resources. Ecuador for example uses the dollar and also produces about a half of a million barrels of oil per day.

2. For many developing countries, the whole point of using the dollar is that it precludes monetary over-engineering or corrupt practices that give rise to inflation. This makes the economy safer for the have-nots, who have fixed local-denominated savings and/or earn a fixed local-denominated wage.

3. Simply using the dollar makes it easier to facilitate trade, tourism, and remittances. Panama does a lot of shipping and transit. Ecuador is a tourist destination. Remittances are the major source of foreign income to El Salvador.

Those countries that accept dollars and also maintain a dollar-pegged local currency are able to conduct monetary policy while also establishing a measure of confidence in the stability of their currency.

What you are missing in your detail is that ecuador actually got itself into a very serious currency bind precovid, and it seems to be staying that way.

So this would validate parent comment and actually negate your assertion that parent was incorrect.

That being said, this is half the story. And its the other part that matters. This is the first time ecuador gets in trouble post USD adoption. Where it goes from here will directly prove or disprove the very thesis, that parent comment assumed was a foregone conclusion.

Thus , your refutation may be correct after all, except for what i believe are different reasons.

Ecuador had protests over removal of fuel subsidies to satisfy IMF debt conditions in Oct 2019. Hard to see how that's a "currency bind" in any sense.

> This is the first time ecuador gets in trouble post USD adoption.

Uh...what? You're just making stuff up.

Ecuador defaulted on two bond issues in 2008.

Ecuador had to borrow billions from China in 2015 when petroleum prices collapsed. This affected the country for two or three years. Public sector workers had to wait months for their salaries at times. In an alternate reality where Ecuador uses its own currency, the government would have printed its way through that problem and the resulting devaluation would have hurt everyone with savings or wages.

I dont argue for printed currency. We are actually in agreement there. I'm responding to parent halukakin who said

"Strong currencies are not the solution to poor governance. Good governance and democracy makes a country and its currency strong. Not vice versa. "

I contend that ecuador could prove that statement wrong. The 2008 crisis caught everyone off guard. Once Ecuador comes out of this crisis, we will really see if this experience will be enough to institute good governance reforms which were elusive during the constant ups downs of local currency inflation.

This is especially true for refugees. They run the very real risk of being killed for any money they are carrying but if one has one's keys memorized then no one knows you have funds and you are somewhat safer.

Over 1/3 of the world's population lives in countries with declining or unstable democracies, crypto currencies provide a small cushion from that in some situations.

1. Inflation, which means that everyone is getting the money they are owed, but can't do as much with them

2. Defaults/bankruptcy/breach of contract - people and businesses just run out of money and stop paying their debts

If your country can print money, you will be in situation 1. If your country can't print money (e.g. because it is using BTC or USD or Euros or whatever currency they can't control), then you'll be in situation 2.

I for one prefer situation 1, because there is a chance of recovery from there, and normal life can go on somewhat naturally.

In these countries, those in power rob the public blind. They steal the country's wealth and do anything they can to hold on to and expand their power. Giving the state more power just means giving the elite more power to rob.

The point is that when a state is inept and driving the country into bankruptcy, the grey/black market can be a lifeline keeping people alive.

You don't want to chain the population to the efficacy of state, by closing off avenues to non-state payment-systems and currencies.

The internet, and the currencies built on it, can provide alternate, superior governance systems for financial and economic collaboration that can operate in parallel with state-administered ones.

Yes they are.

It's really upside down that you'd point out that 'governments can just print money to pay people!' as somehow being an advantage of good governance.

Well, partly, but it depends on a high degree of integrity, if absent, will entail total dissolution.

In absence of a government with integrity, then a 'strong currency' such as one that the government has no control over, say a Caribbean Island that uses USD for example, is preferable to anything else.

"Good governance and democracy makes a country and its currency strong. Not vice versa. "

First - democracy has nothing to do with it.

Second - 'good governance' is the opposite of printing money to pay bills.

In an unstable economy, USDs or Euros are preferable to worthless paper or Bitcons.

Then that country would be paying the unseen tax of inflation as the US banking system prints more and more USD. Said country would basically be a US colony.

It may not be optimal for certain reasons to use USD, and they'd lose some advantages, but there are others to be gained that might make it worth it.

To the extent there are no real capital controls on USD anywhere - and - the US Fed is separate from the government, then nobody is going to be a 'colony' of the US by using USD.

What about countries that don't use the dollar as currency directly, but keep a fixed exchange rate to the dollar - they would be paying the unseen tax of inflation too, right? With a fixed exchange rate if the dollar value falls, so will the value of their currency. So that would mean Hong Kong, Cuba, Jordan and the Netherlands are all "basically US colonies" too. (China may be kind of surprised about that first one.)

Does this work for other currencies, or just $USD? Are Martinique, Andorra, Montenegro and Kosovo "basically EU colonies"? - they all use the Euro as currency, but are not part of either the EU or the EEA.

We don't actually have to hypothesize about what would happen if an unstable economy switched everything over to dollars (or Euros), either directly or by exchange rate peg, because it has already happened, many times.

https://www.worlddata.info/currencies/usd-us-dollar.php

Most of the valuable property in major metros is owned directly by US-based or EU-based emigrees , who paid top dollar for property that has a ROC duration in excess of 20 years.

Most of the metro areas on these countries are rapidly turning hollow projects which cheap rents or undeveloped land. It is quickly becoming like paris.

Flat rental 2000 EUR. Buy price: 2M EUR.

When someone that is not a local is taking all your valuable land... Thats the textbook definition of colony

When President Arnulfo Arias tried exercising his nation's right to issue sovereign currency, he was deposed in a US-backed coup on October 2, 1941.

Bitcoin, on the other hand, can be controlled by any miner or group of miners having over 50% of the network's hash rate[1]. We don't know the identities of the miners and we have seen them engage in political actions that change the behavior of the currency[2].

1. https://www.investopedia.com/terms/1/51-attack.asp

2. https://en.wikipedia.org/wiki/List_of_bitcoin_forks

Feel free to call shadowstats crazy, but nothing in it is false. It's just another perspective. http://www.shadowstats.com/alternate_data/inflation-charts

You dont need data to know that the sky is blue.

That being said parent did not help himself throwing statements out there without a foundation.

Here is what i believe he should have said:

CPI for goods fails in the following:

Accounting for changes in sizes and quality of certain products (i.e. instead of raising prices vendor will lower quality or amount of product )

Accounting for healthcare costs is fundamentally flawed. This only factors out of pocket costs when the majority of americans are effectively paying 80% of healthcare premiums via reduced grosd wages in the form of "employer contributions"

Accounting for substitutions of products in the cpi itself which are not reliable substitutes, or the exclusion of certain items (housing) which are clearly inflationary.

There is also a lot of criticism made for the boskin commision changes https://en.m.wikipedia.org/wiki/Boskin_Commission to cpi which messed with base prices and thus with true measurement of cpi.

Data always trumps common sense, that's why we have science :) - if science had a motto that would be it! Sometimes we need more data, but common sense is often trivially wrong.

I would argue we do in fact need data to show the sky is blue. The data shows us the sky is not in fact "blue" but rather a blend of various peaks and valleys of radiation. [2] It's not so much blue as a bunch of colors at once that happen to be blue-dominant. Further it’s actually the “inverse of blue” in that blue is allowed to pass but all the other colors are absorbed.

> Accounting for substitutions of products in the cpi itself which are not reliable substitutes, or the exclusion of certain items (housing) which are clearly inflationary.

Housing on a $/sqft basis has tracked inflation since the 1970s across the US. What's changed is zoning policy, but zoning policy isn't a function of money supply. [1]

A reduction in welfare is not necessarily inflation or monetary policy, it can just as easily be social policy. You can't pin all society's ills on the evil Fed and their consistent and predictable 2% rate of inflation.

> Accounting for healthcare costs is fundamentally flawed.

Healthcare costs exceed inflation. That's not a function of monetary policy, it's a function of a fundamentally flawed healthcare system in the US that needs to be fixed. That's not the Fed's job, that's social policy.

> There is also a lot of criticism made for the boskin commision changes https://en.m.wikipedia.org/wiki/Boskin_Commission to cpi which messed with base prices and thus with true measurement of cpi.

Peoples needs, wants and expectations change over time. In the same way the S&P 500 and Dow Jones cycle through companies that are no longer relevant, doing so with the CPI basket is the only rational thing to do. For instance, Caviar and Lobster used to be crap food for poor people -- they're crazy expensive now. Is that inflation? Of course not. Totally fair to eject them from the basket.

[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...

[2] https://www.antenna-theory.com/tutorial/whyistheskyblue/purp...

The issue with this argument is that good government is a very hard problem that in many cases has no clear immediate solutions. While things like crypto many not be a solution they are a vood stopgap solution for the problems created by bad governments - at least until we can get thw good governance problem solved

What we have seen with crypto currencies are extreme volatility, not useful to base a country’s economy on, and because it is decentralized, no-one can really intervene to control this volatility, by e.g. changing the interest rate, and nothing is priced in crypto currencies, to sort of keep it tied to something.

The only metric for what a coin should cost seems to be the electricity/leasing of computers required to mine one. But even this metric is not good, as it is proportional to the size of the network, which is not a constant, and is likely to grow, as the price goes up.

When/if the supply problem is solved, and a more environnementally friendly consensus mechanism than PoW developed, there won't be many arguments against adopting cryptocurrencies as the default payment method.

[1]: https://debaseonomics.io/, https://reflexer.finance/

Being able to buy something I want today, because the price went up from yesterday, or saving today when I would have spent, because the price has dropped today causes a regulating effect.

Right now the usage of it is low, small changes in this equation have an outsized effect.

About volatility: you're right but the thing is: even if BTC is volatile, over longer period its value rises up. Nobody lost any USD yet if he kept his BTC long enough.

You’re talking about a supranational currency, and I have sincere doubts that grifters of all sorts would not try to take over and manipulate such a currency, as they have for bitcoin.

The governance is more important than the tech IMO.

It needs to be stabilized if we're ever going to replace fiat currency.

Andreessen Horowitz invested $15 million in https://en.wikipedia.org/wiki/Dai_(cryptocurrency)

[1] https://www.atlanticcouncil.org/blogs/econographics/the-rise...

[2] https://en.wikipedia.org/wiki/Instant_payment#Examples_of_in...

This was never the promise of blockchains or decentralized currencies because those things cannot fulfill the promise.

There's a much more pragmatic answer and that's to use Euros, USDs, Pounds or RMBs for a decade or so until the government has legitimacy.

'Cash' is useful in these economies.

Also, it's possible to provide digitized banking for the purposes of transferring money without the notion of introducing new, funny currencies.

Most exchanges require several forms of ID and verification to buy or sell cryptocurrency. I had to use a smartphone to take a picture of myself with my photo ID before I could even use most exchanges. Someone who doesn't have photo ID, computer or a working smartphone are out of luck in that scenario.

Bitcoin might make sense for remittance, with the intention that it is then liquidated after being received.

It's less regulated so it's more likely people will make poor trades - maybe it's not in their interest as you are implying, but they do it anyway.

Countries can make owning foreign currency illegal. BTC is easier to hide than Euros (cash or electronic). You can trade BTC back to cash without a paper trail by writing down a private key.

In terms of why someone would sell BTC for a failing currency? Maybe they are also a local and have expenses to pay. Otherwise, it's likely the seller is selling for USD or something and there's an intermediate conversion so someone else who needs it ends up with the local currency. It's pretty common to get out of the currency as much as possible (assets, other currencies, BTC) then only dip back in for as little as possible to pay local expenses.

Well, except that the conversion into/out of fiat and the access to the network to transact the crypto are all things the government will usually be quite able to interfere with.

The way I understand volatility, it means wild swings in both directions over short periods. Your country’s currency however has been monotonically weakening. And the citizens have been able to react to that steady decline by storing their wealth in different forms, as you said yourself that you’ve been storing it in USD.

For sure even USD denominated assets have periods of volatility as we saw March last year when the entire world sought to refuge in the safety of US treasury bills or currency. Oil too witnessed some crazy gyrations like negative future pride. But they are in reaction to the extraordinary phase the world was going through then, when the world and hence the business practically shut down. Something which hasn’t happened in at least a generation.

Butcoin prices on the other hand regularly swing 10-15 in a day. Definitely not something you’d call stable compared to any of the world’s current currencies. Perhaps these swings will dampen over time?

> I agree that for someone living in US or EU there's no much point using BTC.

This is quite a tenuous argument however.

First, currency is only intended to be stored for as long as necessary to purchase the necessities of life or value preserving investments. Losing 250% of value over 7 years is an inflation rate of 14% annually, a hair over 1% per month. At the end of each month you're left with 99% of the value you started the month with. That's sub-optimal but certainly not a dealbreaker if everything else were stable and functional.

The early 1980s in the US had similar inflation rates [1].

Assuming your country isn't sanctioned you could have dropped that money into all sorts of safe havens.

Further, the issue is of course transaction fees. They're about $20 each right now, and the only place those fees are palatable are rich countries with stable financial systems. In countries without stable financial systems they're prohibitively expensive. You can avoid that with Layer 2, but of course, Layer 2 offers none of the benefits you seek with Bitcoin in the first place. Exchanges are centralized, trustful and censorable.

It genuinely, truly meets the needs of nobody who isn't speculating.

It's basically the "ruined fresco" of payment methods. From a distance it looks right but as you zoom in you realize mistakes were most definitely made. [2]

[1] https://www.usinflationcalculator.com/inflation/historical-i...

[2] https://www.npr.org/sections/thetwo-way/2012/09/20/161466361...

See, it doesn't matter what the technology behind a currency is, it ain't going anywhere on your government's turf without permission. They have the ability, if they choose, to go door to door looking for 'unlawful money launderers' or any other designation they slap on the use of crypto and there's nothing you can do about it.

Unless it acquired significant negative value, no, it didn't.

I'm not sure if you mean it declined to 1/2.5 times it's value (-60%) following the popular-but-annoying usage of “n times less” but converted to percentage (it's an idiom that isn't used with percentages and is mathematically wacky to start with) or if you mean to say it declined by 2.5 times it's post-decline value (-71%), using the ending rather than the starting value to calculate the percentage change.

Here's the worst I've ever heard of:

https://en.wikipedia.org/wiki/Hyperinflation_in_Zimbabwe

Yes, you read that right:

"However, Zimbabwe's peak month of inflation is estimated at 79.6 billion percent month-on-month, 89.7 sextillion percent year-on-year in mid-November 2008."

I recall interviews with government employees, who were quitting in droves. The Government wasn't keeping up with inflation, so at the end of 2 weeks, your check was basically worthless.

The place was falling apart.

People would run to the bank, cash pay checks, and buy STUFF. Anything. Anything physical. TVs, couches, bikes, blenders, ANYTHING. In one interview, a woman's living room was filled with random pieces of furniture, stacked to the ceiling, and a TV.

To trade. For barter.

Because even an hour later, that paycheck was worth so much less.

Madness.

https://www.bloomberg.com/news/articles/2020-07-14/zimbabwe-...

But people who were in debt are doing great!

at the moment, but we are seeing institutional failure all around. as trust in the institutions fall, the importance and value of crypto/decentralization increases.

How? 'Slowly and steadily.'

Not the poster though.

BTC is useful for exactly the scenarios it's almost exclusively used in now: speculative transactions (buy low, sell high), or transactions for less than legal stuff and the overwhelming majority of proponents are in these 2 camps. There's a much smaller group of proponents made up of people who don't understand currencies in general (besides the basics, like spending them), or cryptocurrencies in particular.

I'm sure some form of electronic tender would fill this role you're describing but it's not BTC and probably none of the major cryptocurrencies on the market now.

* (putting aside the network capacity, number of transactions/sec, the cost of producing a BTC and of a transaction, etc. which make it completely unsuitable for the purpose of using the currency instead of just storing and trading it, which is probably the only significant purpose of BTC today)

BTC is fundamentally deflationary in nature - let’s ignore the price volatility and the like for now, I’ll cover that later.

It has also so far proven incredibly resistant to attack, both inside and outside the community and despite easy billion dollar payouts if an attack would be successful.

There are also efforts making good progress (lightning network among others), addressing structural issues, and large scale semi regulated brokers with good track records (coinbase, kraken).

The price volatility is speculative, and while some is get rich quick (well, a lot), some is also what happens in a deflationary spiral.

If we speculate that Bitcoin will end up being a ‘not able to be broken by a greedy gov’t like all the other currencies’ means of exchange, the current price is cheap. Every large institution will need some to clear central bank type transactions (the part that may be what ends up on the blockchain), and 14 million ish isn’t enough at current prices.

If we speculate that will never happen; the current price is ridiculous and it’s all just a giant Ponzi scheme.

Frankly, neither of these options it is fair to rule out, and the volatility is because of uncertainty and the wide variability in value for Bitcoin between these options.

We’re entering a stage where global attitudes are shifting to one of distrust, especially between countries and citizens and their gov’ts, and some means of exchange that doesn’t require a distrusted entity to play nice has value, even if it isn’t 50k per.

I agree but in the grand scheme of currencies and payment infrastructures they barely got out the door.

I believe today and for the foreseeable future BTC will be adequate almost exclusively for speculative traders and people who need legal deniability. Most people throw around narrow interpretations for why BTC would be good and they're all good explanations if you look just at selected arguments. Take the "BTC is great as a currency in countries with steady high inflation" stance which might hold if you consider only a really narrow set of set of BTC criteria.

I'm not ruling out anything for some future really. As a personal opinion I believe there's room for e-coins (I'll stay away from the "crypto" nomenclature as they may not rely on a blockchain or crypto per se) but BTC in particular has no real room in a CB for more than a fad (also speculative). Think at the central mandate of a CB: price stability and inflation. Controlling these is quintessentially antithetical to BTC as a main currency, or as a currency. BTC as a decentralized currency takes central banking out of the equation. Or conversely central banks take decentralized currencies out of the equation.

So even if you think of it pragmatically, no government or central bank (since they should be as independent from each other as it gets) would allow replacing the country's currency with BTC both for "selfish" reasons - they'd lose control. But maybe even more importantly for national security reasons. No country wants a coin which can be sent spinning just because some CEO (or worse, your enemy) decided to pull a shady maneuver for personal gain.

The kind of control currencies need to be fit for the purpose of a general, national currency for your citizens simply precludes using BTC at that scale. Should BTC ever become as "big" as a real national currency I'm certain it would show many of the same cracks. Except the small players (average Joe) would have nobody to turn to when things go sour. No central authority, no central responsibility. You see this whenever there's a new hack or financial maneuver that parts people from their hard earned cryptomoney how they suddenly lose that blind faith in "the coin that governments can't control" and start asking for regulation. You can only regulate when you have control.

Second part - I think you’re also misunderstanding? Central banks hold gold and other countries currencies for international clearing, export/import, and national security reasons. A central bank is not holding them for price stability and inflation control. Only a small handful of central banks (the fed) meaningfully target those goals, and if they do it is for their own fiat currency.

If you think a central bank is going to hesitate to hold a useful asset for international exchange purposes if a ‘ceo or worse your enemy’ could send it spinning, you’re not paying attention? China’s central bank holds at least $1 trillion US dollars for instance [https://en.m.wikipedia.org/wiki/Foreign-exchange_reserves_of...], along with Euros and every other currency useful for it’s goals. There is a huge variety of foreign reserves currencies in wide use [https://data.imf.org/?sk=E6A5F467-C14B-4AA8-9F6D-5A09EC4E62A...] covering everything from Chinese renmenbi to Swiss Francs and UKP. All of these change dramatically relative to each other on short notice, all are enemies or economic competitors with some selection of people using them as reserve currencies, and there is no central authority to go crying to if one of them defaults on their debts or inflates their currencies.

And third part - I’m not saying it’s likely any government would replace it’s fiat currency with BTC or any other currency out of it’s control. I’m saying Zimbabwe and many other places don’t really run on their local currency, they run on what people use (currently dollars in most cases, but some places BTC is getting traction) - because their gov’ts destroy the utility of the their local currencies and people can’t trust it.

Oh, that wasn't meant to be an argument against something new. As I said repeatedly, it's an argument against BTC as it exists now and as it will be for the foreseeable future. The expectations for a stable "national" currency are incompatible with the pillars of BTC. That was my original point.

The Fed, the ECB, the Central Bank of China all have price stability and inflation as a mandate, of course for their own currency. And this should already hint that they want control over their national currency. Gold and other countries' currencies are explicitly things that are regulated by the respective countries and/or "relatively" stable. I'm not aware of any national currency as volatile as BTC. They're all substantially more more resilient to outside manipulation because they're regulated and traceable. Governments and Central Banks don't want their country or citizens to rely on a currency they don't have any control over especially in places like US, EU, China, Japan. Just think of the UK refusing to give up the GBP to adopt the EUR because it involved losing control of the currency. So while I can imagine a bank (central or commercial) holding BTC one day as an asset, I'm having a really hard time seeing the "unregulated currency BTC" being used as a "national currency" in any place that matters.

> If you think a central bank is going to hesitate to hold a useful asset for international exchange purposes if a ‘ceo or worse your enemy’ could send it spinning, you’re not paying attention?

If you were to ask Mario Draghi or Christine Lagarde they would tell you no CB should hold BTC. I'm not saying I can see the future but I'm trying to understand what you know and they don't.

When China deliberately weakened the yuan to gain an advantage in the trade war with US (to boost exports) it was immediately noticed and attributed and that could be (was?) used as justification for sanctions and tariffs. Bitcoin is decentralized and pseudo-anonymous.

> I’m saying Zimbabwe and many other places don’t really run on their local currency, they run on what people use (currently dollars in most cases, but some places BTC is getting traction) - because their gov’ts destroy the utility of the their local currencies and people can’t trust it.

So they rely on a well regulated currency like the USD. How would BTC improve on this? The USD is stable enough for Zimbabwe to use because it's under central control.

Taking more practical approach for the regular person, at the absolute minimum a currency is supposed to come with consumer protections that are derived from regulation. BTC was specifically designed to curtail regulations. This won't be fixed by faster or more efficient networks. That can't be "fixed" at all because it's one of BTC's tenets: stay unregulated and out of gov't control. So your citizens are not only using an unregulated currency that offers them no protections, they're also extremely vulnerable to outside manipulation.

BTC is an unstable coin, that cannot be regulated to offer consumer protections or complying with anti money laundering laws. In theory this recommends it to speculators and people who are looking to be shielded from the law. The reality just happens to match the theory to a T.

Some e-currency will surely fit the bill one day though but I'm not entirely sure if there's one to be both regulated and unregulated at the same time, to make everyone happy.

I was quite explicitly referring to speculative future events, and how their odds of happening directly impact current pricing of bitcoin.

USD is reasonably well regulated now and has been historically - by some definition - at least as well as any of its competitor currencies, though none of them are looking particularly great right now by traditional measures.

What are the odds it will remain so for 10 years? 20 years? 50 years? Less than 100%, better than 0%.

As BTC addresses issues over the next 10, 20, 50 years - could it be a viable option for central bank clearing in the way JPY, USD, or gold is now? What are the odds? 100%? 0%?

With the work, attention, and considering the existing progress it's made, will it be a viable option for a trans-national or even national currency over the same time frames? What are the odds? 0%? 100%?

I'm pointing out that 1) none of those options is clearly a 0% or 100% outcome over the time frames we're talking about 2) depending on your individual judgement and how optimistic or pessimistic you are about various parts of these equations, depends on what you think BTC's value currently is.

Even people just hedging their bets against a not impossible outcome can lead to a deflationary spiral, leading to high prices until there is clear data one way or another where things will end up.

Vastly different levels of productivity between regions of the same economic zones or between zones can result in crazy social friction without trade regulation and controls - how will BTC land manage this friction?

Additionally - the energy and security requirements of btc zone participants will become crushing. Why will market participants continue to labor in this spiraling High energy hell when they can retreat to the much lower energy state of a trustful, managed economic zone? It will be like a breath of fresh air.

I doubt population of your country at large can afford bitcoin transaction fees for their daily shopping.

BTW, are you saying that your currency has negative value now? I assume you mean a 2.5x inflation multiplier over 7 years, or +14% per year. That's mild compared to an order of magnitude walk of the BTC-USD rate over just one year.

The only real use case for BTC I see is moving capital between jurisdictions.

The problem is not your Central Bank, it's almost assuredly a total dysfunction of government and the civil services - which will have effects more far reaching that Central Bank problems.

The solution is not BTC.

It's to use something common and trusted, temporarily, like USD or Euros until there is enough credibility in the system for external parties to accept your own currency.

Or - to overthrow your government, install leaders with integrity and hope that international bodies accept the change, because if they do, you'll be in a much easier position issuing your own currency than having to issue debt in a foreign denomination.

Put another way: it's not a currency problem, it's a governance/management problem that exhibits itself in currency problems and other things.

BTC will not really help you have a better managed government.

This is what causes they hyper sensitivity, authoritarianism, and 'blame America for Everything'.

But yes, BTC is completely unpragmatic.

USD, at least in Latin America, has the benefit that it will creep into the system irrespective of what anyone in charge says.

Nobody needs to be told that USD's are 'good' the hairdresser, cabbie, landlord, grocer will just take it.

I wonder if Euros have the same effect in E. Europe and North Africa. Maybe these days.

Hyperinflation is a problem of massive corruption and incompetence in government. It doesn't happen by accident in an otherwise stable society. If you're concerned about hyperinflation, you should assume the bank (or "exchange") will be subverted and transactions will be censored. Bitcoin was built to solve those problems, but does not scale and so cannot.

This is, by the way, the only situation where I'm at all sympathetic to cryptocurrencies. If someone can come up with a cryptocurrency that scales and that isn't controlled by cartels, I'll be glad that it can be used in unstable parts of the world.

If you're really wanting to compare apples to apples - For traditional banks doing cross border transactions, it takes up to five days at most global banks, not counting weekends or bank holidays to actually settle with a lot more intermediaries involved.

You do your daily spending through the normal channels, sure, but why would you need to keep your cryptocurrency savings in a bank in such a situation?

Other cryptocurrencies are faster by smallish constant factors. None of them, at this time, are scalable. None of them are fast enough to be usable by millions of people.

Some might call me a conspiracy theorist, but the fact remains there’s no good way to verify any of what they’re telling us is true, other than to trust people with billion dollar reasons to mislead, or rely on an SEC which has repeatedly failed to do its job and stand up to big institutions (see Moody’s subprime ratings, or Robinhood already getting fined by SEC but for trivial amounts).

There’s certainly pump and dumps, fraud and manipulation in crypto, but some could argue a lot of stocks exist right now with terrible fundamentals but huge market caps that nobody labels a pump and dump because “serious” institutions say the valuations are “forward looking.”

All this is to say, finance is a game with massive incentives to deceive and manipulate. We see that in the traditional finance space and in the crypto space . But long term, Id argue in many ways the decentralized nature of crypto lends itself to far more transparency than our traditional systems.

Now, that doesn’t mean it makes sense to buy coffee with crypto, or that a specific coin is the solution, especially one with the type of technical challenges BTC has. But in a broader sense, I do think decentralized finance is starting to look more and more like the future, if the alternative is to continually put trust into institutions that repeatedly betray that trust.

The worst financial hiccups happen in areas without regulation. There were no rules on selling subprime mortgages or shorting more stock than exists, but unlike in the cryptoverse if something blows up it can be patched with legislation and restitution to victims. If your crypto gets stolen or a coin gets pumped and dumped, there is no recourse. With no connection to the real world comes no trust and no mercy.

I spend more in crypto some months than other currencies.

Bitcoin is being used for normal things. Want to buy a Tesla?

i totally agree with you. i feel that if you keep digging, you'll find yourself convinced over time that BTC's "technical challenges" are not the flaws that they originally appear, and that in the long run crypto does make sense as a currency itself, in addition to a financial infrastructure.

Also, could you please stop posting unsubstantive comments generally? You've unfortunately been doing a ton of that lately. We're trying for something a bit different than that on this site—if you'd optimize more for signal/noise in your HN comments, we'd appreciate it.

The most convincing "point" of bitcoin I've heard is to accomodate transfer of large sums of money across borders, quickly, with minimal transaction costs and oversight. Everyone here can afford the fee to transact 8 billion dollars worth of bitcoin. And settlement happens in seconds to a couple minutes. That's appealing to people trying to move millions or billions of dollars around.

I can basically think of two scenario types when you are in need of international, spontaneous money transfer:

a) "I just got carjacked in Sierra Leone and need some money for an hotel and a flight home"

b) "I have some weird novel business and I would like to pay my contractors in East Timor biweekly"

I cannot image using Bitcoin for either, first one because of the convert-to-money-thing, second one because of the volatility. There is also some kind of - how do you call this - meta-trust that I just don't have in Bitcoin: Go off-grid for two weeks and there is a non trivial chance that some weird shit happened within crypto that is now an obstacle (crash or rally, outlawing, split, ...). That does not happen with US dollars.

I got the feeling that this is yet another incredibly obscure use case that doesn't even really work Bitcoin fanatics (not directed at the quite reasonable parent comment) use to justify their gambling and Lambo-dreams. Just like "it could be the new gold" or "what if the US gov collapses".

But I am certainly no expert in international money transfer by any means, so feel free to change my mind!

For people in countries with a more stable economy/currency, this is very true. Even in countries with a bigger inflation, things are a bit more predictable.

But of course, different countries/economies/currencies have different realities.

That is fair, but it would be more accurate to say 'has not happened with US dollars since 1930'. Currencies collapse is not that unusual an occurrence, my own (German) grandparents live through five separate currency regimes in the same country. Being truly uncorrelated with most other investments can be a real selling point for a hedge like BTC.

Disclosure: I own several cryptocurrencies including BTC which I mentally categorise as 'collectables'.

Eventually it'll be regulated after a bunch of opportunistic "investors" get hosed - which ironically, will make the dump even worse.

[1] https://www.valuethemarkets.com/2021/02/09/if-dogecoin-is-a-...

This is woefully incorrect. Wire transfers are neither instant nor cheap, depending on the source and destination country.

If you wire from US to US, or EU to EU, they yeah, maybe.

The moment you move large sums across borders, especially to /from countries that aren't in the US's "good guys" list (as dumb and childish as that sounds, this is typical language in USistan for politicians and media), things gets very tricky.

Until BTC exchange rate gets stable or gets pegged do the ground, it’s gonna float around in the air of extreme volatility and manipulation - pretty risky adventure to transfer large sums of money.

That said, there are differences in settlement guarantees at layer 2 that might make certain use cases less optimal.

layers?

Bitcoin on-chain is layer one: slow, sure, and after 6 confirmations considered irreversible and immutable.

Layer 2 protocols would include the lightning network and the liquid bitcoin protocols - both systems designed for different use cases, with differing technological benefits and risks. There may be other layer 2 systems that I'm not aware of.

Some might consider the OpenBazaar marketplace protocol, the Open Timestamps (https://opentimestamps.org/) application, or the Bisq decentralized bitcoin/fiat exchange to be layer 2 applications, as they're built directly on top of bitcoin but includes protocols. But I think they're simple examples of the kinds of applications that can be built on top of the programmable trust-net that bitcoin represents.

Because bitcoin is a decentralized and permissionless technology protocol, anyone who thinks of a way to build on top of it can do so---without needing anyone else's permission.

Layer 3 might be applications built on top of layer 2, such as the censorship resistant Juggernaut chat app, built on top of the lightning network: https://www.getjuggernaut.com/. As layer 2 matures, I imagine we'll begin to see a wave of creativity unleashed globally as people create layer 3 applications.

Of course, you could argue that a hard cap is equally opinionated. But I think it's a much more 'neutral' position, where it deflates because of real economic growth, and you spend it because of your own time preference.

Bitcoin gains 200% of its worth each year on average.

Owning bitcoin, any investment you make that brings home more than 200% a year (+ fin. taxes - fiat inflation) when risk-adjusted is worth making.

Anything else is an objective loss, so you want to really assess what it will bring you subjectively before making it.

In other words, "given that you are basically paid by the financial system to hold bitcoin, any bitcoin you spend should be for something that you value more than what it pays", i.e a smarter investment.

If your basket of goods consists of salty snacks and consumer electronics, then yes, inflation is controlled.

But if your basket of goods consists of Hamptons real estate and fine art, then your inflation rate feels a lot steeper.

Investors are finding it very difficult to discover investments that don't depreciate with respect to that second basket of goods.

That's why institutions, family offices and high net worth individuals are shifting single-digit percentage allocations into Bitcoin.

Also when it comes to setting up an economic system, high net worth individuals are the last people we should be worrying about, not the first.

We do not have controlled inflation (I'm assuming you're talking about USistan). Please remember that the fed is an independent institution which refuses to get audited.

(Also, I recommend you quit it with the "USistan" stuff. It comes off as childish and detracts from the point you're making.)

[0] Maybe "strongly influenced" is a better framing when talking about the Fed.

https://www.newyorkfed.org/aboutthefed/fedpoint/fed35.html

https://www.federalreserve.gov/faqs/about_12784.htm

In regards to your first point, inflation is targeted at ~2.5% a year. Some years do better and some do worse but on average that is the inflation rate. I challenge you to look at the inflation rates (provided below) in the first half of last century and provide a reasoned argument for why having years with +16% inflation (and years with -10% inflation) is a better system of currency than what we have now where people freak out if the deviation is over 2%. The gold standard provided a volatility that only hurt those with less money, and the argument your making is a fallacy (and is the reason I left the Libertarian party four years ago.)

https://inflationdata.com/Inflation/Inflation_Rate/Historica...

That is incorrect. On average it takes 10 minutes to mine a block, but you have to submit the transaction to be included in the block, so > 10 minutes before it appears on the blockchain.

However, there are actually many block chains, as miners creates block in parallel, it’s the longest one that is the “official”, but the minute you see your transaction in a block, you do not know if this block will stay in the longest chain, so in general you want at least 5 new blocks, after your block, before it is considered “safe”.

So now we are talking about one hour to do a transaction, and that assumes that the network is not overloaded, because there is also a cap on number of transactions that can be included in a block.

All in all, it is a terrible system for fast transactions.

Also, eventually most lower-value transactions in bitcoin will be on layer two technologies, like the lightning network (peer to peer) or liquid bitcoin (federated peer to peer, mostly for exchanges and traders to quickly move funds between exchanges).

If you're also doing FX that'll be minutes for major currencies. Should you be going through a network of correspondence banks from obscure bank to obscure bank it might be longer but even then rarely days. If currency controls some dalay depending on regulatory setup. Even if the banks do netting, cheaper than RTGS, that should be just a couple of hours between reasonably large banks.

What you may have is a problem with your bank or it using ACH.

It takes 5 work days for the wire to fully clear. Since 5 days is a full work week, it almost always bleeds over to the weekend and in reality takes 7 days.

BTC might still be a terrible system for international transactions but it's still 168 times faster than the one that exists now.

It is 168 times faster than what you currently use.

There are services like TransferWise who specialize in fast international money transfers.

I could imagine that part of your delay is because the bank your family use (in Croatia) does not themselves handle international transfers, so they go through an intermediary bank, only adding delays.

I have often done ~12 hours international wires from Wells Fargo (U.S.) to Asia, and here the delay could simply have been due to the time zone.

Within the European Monetary Zone I often see money arrive in 10-30 minutes (crossing borders).

Also yes, within Europe, an IBAN to IBAN transfer is pretty much instantaneous. However US is not in the IBAN system, so that's a different story.

There are probably multiple reasons why the transfer takes a week, but the spirit of my comment was that an hour long (at worst) transaction time for BTC is actually very fast if you look at it through the international money transfer lens.

1. https://www.vice.com/en/article/ywbbpm/bitcoin-mining-electr...

2. https://digiconomist.net/bitcoin-energy-consumption/

they are immediate, cheap and can be exchanged for real money for free.

I don't know, haven't explored that option honestly.

Or try to buy anything time/quantity limited, so you don't get it because the transaction took too long to complete.

Meanwhile, in Canada, I just do a money transfer by email without any fees (if sending more than $10), and it's almost instant if the receiver have auto-deposit set up.

And to be honest I do not see the point for them to support a decentralised currency like. just complying with the regulatory rules ( KYC, anti Money laundering,etc...) Would be a real nightmare

Anyways, there are plenty of stablecoins if that's your thing and you can use Bitcoin (the network) for the rails only.

Also, stablecoins staying “stable” is a huge risk you are taking on if you use them.

Again, if you have billions of dollars, you are going to be doing a lot more risk analysis and want a lot less uncertainty than you are going to get with any sort of cryptocurrency that exists today.

Moving large amount of money without government interference, however, is certainly a feature of Bitcoin that fiat currency usually doesn't have. And there are some (though perhaps not many?) non-shady reasons why someone might want this.

Getting that 1mm+ from one currency to another is a whole different story, but that story only gets worse if you involve crypto.

Paying $40 in wire fees to move $200 sucks, but it's just not an issue on large transactions. So I think your real use case is lots of small transactions, not a few big ones. And unless you can spend the crypto directly, the volatility can kill this application pretty easily.

What am I missing?

Here in Brazil, getting money in and out is a nightmare if above 5k USD.

I live in Brazil and work for a US company. My first month payment took 3 months to clear, and because of 3 accumulated payments I got audited and the 4th pay got delayed again. The first one that cleared in 3 days was the 6th payment. All payments were charged 40 USD to my employer, but 20 was charged by middle man every month.

I also have a US based health insurance but (again) I currently live in Brazil. I had a surgery reimbursement be withheld for 65 days, I had to send dozens of documents and when they finally cleared, I had not only lost to exchange rates, on middle man bank took 20 USD and my branch in Brazil took an extra 170 USD.

For an example of this take a look at something like Strike Global using bitcoin's lightning network.

https://jimmymow.medium.com/announcing-strike-global-2392b90...

"Far more of than any other cryptocurrency" is kind of a moot point. Does "bitcoin" (the people converting it to cash) have enough reserves in any real currency to cover even 10% of its value? There's no federal government backing it, and as best I can tell nothing to prevent the proverbial "run on the bank".

I still struggle to see how bitcoin has anymore intrinsic value than collecting pokemon cards. It's worth something right up until it isn't without a major government supporting it.

The intrinsic value argument is old and tired at this point so I'm not even going to bother with it.

Yes, Bitcoin at this stage is extremely volatile and anyone buying it to hold as an investment should understand it can lose or gain a lot of value quickly. However, it does have multiple use cases at this point that clearly the market has determined have some type of value. We're still figuring that out.

As a side note, if you do some digging you can find some pretty good on-chain analytics that can theoretically put a sort of floor on the price based on how coins have moved over time. There are now quite a few sites like glassnode.com, cryptoquant.com, coinmentrics.io etc that provide this data or if you are technical enough set up your own node and verify it for yourself.

>Strike then takes the bitcoins and automatically converts them back into Euros using its real-time automated risk management and trading infrastructure.

Really, they convert Bitcoin into Euros with a "real-time automated risk management and trading infrastructure"? That explains literally nothing. Who owns the Euro currency that is willing to sell it for bitcoin? Where is the liquidity coming from?

You can easily look up the volume traded on these exchanges. There are still some shady exchanges out there so I’d mainly look at the more trusted/regulated ones like Coinbase Pro, Bitstamp, Gemini, Kraken etc.

Strike has already released a working app for US customers that I’ve been using without issue for payments to friends and family as an alternative to Venmo/PayPal.

That means Strike needs to have reserve currency to cover any fluctuations between the time they "instantly settle" your transaction, and when they actually are able to convert that into USD or Euro or insert currency at an exchange.

I keep getting downvotes and yet nobody can explain the magic handwaving to me with anything other than "but my transaction worked". It's great that's working when their transaction flow is probably measured in the hundreds of thousands of dollars, but plenty of pyramid schemes churn along just fine until they grow.

What does using quotes mean? Why not just write Bitcoin?

Bank runs exist in a fractional reserve context -- because banks lend out their deposits (which stimulates growth), your listed balance is actually an IOU. That is, an obligation to "cover" deposit balances, which can be met or not.

Now think of people trading beanie babies. One person sells a beanie baby, the other person parts with $10k. What is there to "cover"? Who is keeping what in reserve? The answer is nothing and nobody --- in a world where beanie babies were currency, this would be perfectly fine.

tl;dr you actually need (fractional-reserve) banks for a "run on the bank"

At any given time, some small slice of world currency demand will be focused on this “protection from unstable fiat currency” and some other small slice would be like a prepper mindset hedging their perceived risk of facing that (eg “but what if the US dollar collapses?” from people with very extreme risk aversion preferences).

That total “market cap” demand for cryptocurrency will surely be way, way lower than traditional fiat currencies, but it may still be much higher than the current total market cap for crypto, which means there is room for completely rational speculative buying and holding of crypto, depending on your outlook and risk preferences, for perfectly sound reasons.

I highly doubt Bitcoin is ever going to become a major direct medium of exchange. But also it does not need to become that. It can offer big value in a lesser role that would still justify speculative buying of crypto today.

If the currency is collapsing, who’s going to trade Bitcoin for the collapsing currency? That’s the necessary first step in this process.

If I’m just trying to cross the border with Bitcoin in my mind wallet so I can convert it back to cash on the other side, why does it matter if 1 BTC is $10 or $10,000,000? It doesn’t, because moving money round-trip through a currency is a matched pair of buy and sell trades in a short period. Net zero, long term.

This narrative that Bitcoin is somehow going to save refugees from oppressive governments is possible, but deeply flawed in practice. Either way, it’s not a long term driver of demand.

Frankly, it’s far more likely that the dictators of such countries would use Bitcoin to flee the country with their citizen’s money and avoid prosecution than the other way around.

Well, you'd probably find someone wanting to trade Bitcoin for goods, and as part of the transaction, someone else would end up using local currencies to buy those goods.

... Of course, in the general case, you're probably more likely to find someone who wants to trade USD for those goods.

If your net worth is tied up in goods, assets, and other non-cash investments, you don't need Bitcoin to avoid currency inflation.

Then you start buying and transacting with good old Yankee dollars, as the good people in places like Zimbabwe and Argentina and Cuba and other such places have done, because this is the low volatility option and dollars are widely accepted. You don't buy the cryptocurrencies, as they are subject to wild price swings and only marginally accepted.

If you can't buy dollars, something like gold is a much better hedge than bitcoin.

I don't think it's that simple. Transaction volume doesn't just appear from nowhere.

IMHO, the stability of the US dollar mainly comes from the geopolitical & economic position of the US coupled with trust that its government won't totally mismanage it. Bitcoin has neither of those things and never will.

Indeed, it takes time to bootstrap a currency. That’s why it’s absurd to expect Bitcoin to be stable when it’s less than 10% the market cap of any other significant reserve asset, and may plausibly keep increasing its dominance in the reserve asset market.

> Bitcoin has neither of those things and never will.

I disagree - I trust much more strongly that Bitcoin will not be mismanaged than the USD, because bitcoin is governed by very simple and utile rules that are practically impossible to change, whereas the USD can be and has been inflated substantially.

I don’t think your first point (the economic position of the US) is as important as you think, especially as Bitcoin comes to be the reserve asset of a larger and larger set of productive economic actors.

Following fixed, unchanging rules is kind of the opposite of being managed, let alone well-managed.

> ...especially as Bitcoin comes to be the reserve asset of a larger and larger set of productive economic actors.

"If" not "as": that hasn't happened yet and it's quite likely that it won't happen.

I'm not so sure of that. For instance: Bitcoin isn't money, but something that people hoard and speculate on. If it was more actively managed, its parameters could perhaps have been tweaked until it started actually acting more like money.

Here is Ross Stevens, CEO of Stone Ridge Asset Management, describing "the point" for an hour:

https://www.microstrategy.com/en/bitcoin/videos/bitcoin-macr...

It sounds like you've made up your mind about Bitcoin, but I believe you've missed the big picture. The above video, if you watch it with an open mind, will help you to glimpse it. Hint: it's not about cappuccino, it's about living in a world of competitively devaluing currencies and resulting asset inflation.

Humorously enough, the same is roughly true of Tesla, a car company which sells 5% as many cars at Toyota while valued about twice what the entire rest of the car market put together is worth.

Their only source of profit is selling carbon credits to traditional automakers who won't need them anymore as they're all moving electric too. One more Hail Mary distraction to maintain the one thousand three hundred P/E ratio. In a manufacturing business. Not software with zero marginal cost. Manufacturing. The industry average P/E is right around 15.

> ...it's about living in a world of competitively devaluing currencies and resulting asset inflation.

Currency is an intentionally-lossy temporary store of value. It only needs to hold its value for as long as it takes you to buy assets with them. At 2% inflation it does. Anything else is a straw-man you'd recognize if you attended ECON 101.

Asset inflation isn't inflation, it's an ROI. CPI is inflation.

This is a typical set of r/Bitcoin talking points that are easily debunked.

[1] https://qz.com/1659246/the-fbi-wants-more-information-about-...

People are buying TSLA because they want to do something about climate change. Or maybe cause they worship Musk. This is probably holding for other companies in other industries. Bitcoin is definitely not only being bought because it’s digital gold. It’s being bought because people are emotionally attached to resetting the system. A bunch of middle fingers to the dollar rich (Bitcoin poor) by a bunch dollar poor (Bitcoin rich). This is why people are buying BTC.

Whether it is TSLA or BTC — value itself is being disrupted.

I hope given Tesla's new affinity with Bitcoin that what they want to do is "make it worse" lol. Tesla is literally selling its green energy credits to dirty car companies, then throwing it at Chinese coal miners.

The market goes through particularly bubblicious periods of pricing mania from time to time. It's happening now, it's happened before, and it'll happen again. I wouldn't read too much into it.

  "..in the short run, the market is like a voting machine--tallying up which firms are popular and unpopular. But in the long run, the market is like a weighing machine--assessing the substance of a company." - Benjamin Graham

The whole run up there were trillions on the side-line, and folks who remember 2008 weren't about to let another V shaped recovery pass them by. They plowed money into whatever they could. Literally everything exploded in value last year. My personal trading account is up almost 14X on a 1-year basis today.

It's nothing to do with fundamentals, just a bubble. It'll revert in time, and then it'll grow again.

Yes, this time could be different. Past performance is not an indication of future performance. That said, it would be the first time something's gone parabolic upward (while lacking the fundamentals) without retracing, and I don't see any reason this time would be different.

[edit: Check this out: (1) https://imgur.com/a/HATGeWr (2) https://imgur.com/a/umQLsnK]

Will it eventually retrace? Probably. Almost surely. But it will probably not matter at that point relative to today.

I think we are in an era where stocks are mostly detached from fundamentals. Ask yourself who truly cares about fundamentals? It’s the uber wealthy who are trying to preserve their capital. Wealth disparity is huge so those numbers are fewer.

The Robinhood investors aren’t pouring over spreadsheets to decide where the best PE ratio tradeoff is most favorable. They aren’t trying to balance growth and income. They are literally buying whatever hyped them the most.

Now regarding the AMD chart. You should consider it in context of their defeat by Intel and subsequent turnaround. That, I think, drove the price movements shown in the chart. Did profit taking from amazing runs also matter? Probably. But you can’t ignore that AMD was nearly bankrupt and had to reinvent itself because it lost so much ground to Intel.

Once they have their peak production capacity and have surplus stock across all markets we will get a better idea of their true value.

The most that the price of TSLA and BTC have in common is that both their values can be represented on a graph.

> The most that the price of TSLA and BTC have in common is that both their values can be represented on a graph.

Well, that and one holds a chunk of the other. They're also surprisingly heavily correlated from a price action POV. I suspect there's a bit more going on than meets the eye. Burry tweeted the crazy level of correlation a few days ago.

>An accurate measure of inflation is important for both the U.S. federal government and the Federal Reserve's Federal Open Market Committee (FOMC), but they focus on different measures. For example, the federal government uses the CPI to make inflation adjustments to certain kinds of benefits, such as Social Security.[3] In contrast, the FOMC focuses on PCE inflation in its quarterly economic projections and also states its longer-run inflation goal in terms of headline PCE.

[1] https://www.stlouisfed.org/publications/regional-economist/j...

Are you aware that a large portion of the population is unable to purchase assets? What do you say to these people? What do you say as the dollars they earn pay less of their rent? Less of their healthcare? Soon...less of their groceries?

I would tell those people that if their government is broken they have bigger problems than their currency and once they solve their leadership problems the currency won’t be an issue anymore. Tough but true. Nothing there changes with Bitcoin and it’s $20 transaction fees.

Lol

Healthcare is a social policy matter, not monetary policy, and nothing to do with increase in the money supply. You take that up with your representatives not the Fed.

Housing is a function of city council zoning policy. You take that up with your city council not the Fed, or with the federal government it you want Japanese style zoning rules. [1]

Childcare is social policy, not monetary policy, and you take that up with your representatives not the Fed.

You can't just point to anything you don't like and say the Fed Did It or is responsible for it. All they do is control the money supply. Nothing more.

A reduction in your welfare isn't inflation. Necessities can outpace inflation. It's bad social policy, but it happens. What you fail to understand is that these prices will continue to outstrip a platonic ideal even if denominated in Bitcoin because the increase in pricing has nothing to do with monetary policy. Any temporary reprieve is due to speculative mania.

[1] http://urbankchoze.blogspot.com/2014/04/japanese-zoning.html

This is the laughably reductionist take that predictably appears on HN when folks think the dynamics of San Francisco apply everywhere.

Housing costs have nothing to do with the Fed? Really? You don’t believe record low mortgage rates are driving demand at all?

Nah, it must be city council zoning policy that is sending home prices soaring all over the country—-even in rural and unincorporated areas.

On average, the price per square foot of housing in the US is exactly the same now as it was in the 1970s, on an inflation adjusted basis. [1] In major metros, that number is higher, because of city policy, but on average, the number is flat. That means on an inflation adjusted basis in rural areas houses are cheaper per square foot.

Once you take into account that interest rates are about 1/5th of what they were back then, it's clear, housing is actually more affordable now than it ever was (per square foot).

Yes, zoning matters in rural areas. Minimum size rules, minimum setback rules -- all sorts of code changes -- have conspired alongside the 20% decrease in average family size and the changing tastes for more space, to make houses twice as big. Same price per square foot -- or lower! -- Twice as big. Twice as expensive.

I was wrong to say it has "nothing" to do with it, but it is by far not the dominant force as evidenced by the numbers.

If you're unhappy about poor folks not being able to afford the houses that's again social policy not monetary policy. I am too. But inflation isn't why.

By all means have at those windmills though, and please, cite your sources so we can have a debate on facts.

[edit] You're missing my point. Pricing in metros is more expensive because of council policy. Pricing outside the city is higher because they're twice as big. End of story. Please CITE YOUR SOURCES. This. Is. Not. Inflation.

You having a worse quality of life is not inflation.

Yes, white flight may or may not contribute to it. That's not Fed policy. That's social policy. And that's my point.

[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...

That doesn't negate the fact that people are still paying higher prices. If the fed is mandated with controlling the increase in prices then it is still upon them to address it, no? The fact that monetary policy is not a primary cause of the good/service specific inflation is irrelevant.

If 'everything is going up the same amount' then sure. If one particular contributor makes an outsized move in the wrong direction what's the fed to do? Fire up the printer at the cost of all of the other areas of life that aren't going up?

Healthcare contributes to inflation, sure, but if government passes a 50% tax on all healthcare procedures overnight, that's not the Fed's job to rectify. It's not their job to fight Congress on how relatively expensive certain things are. If the government decides healthcare should only be for the rich (...er) then it's not the Fed's job to change that.

They would account for what the newly more expensive healthcare cost does to inflation as a whole, and increase or decrease the money supply to match.

Their job is systemic, not targeted. Want cheaper healthcare? Talk to congress, not Janet Yellen.

Imagine if you are a bathroom remodeling company and people are building new bathrooms for $5k. You can build a bathroom for $4K. Suddenly the fed is loosening its monetary policy and people are building bathrooms like crazy with their bathroom mortgages. They are willing to pay $10k per bathroom but your costs didn't change. It's now extremely profitable to build bathrooms and that's exactly what you are going to do. You're going to hire lots of workers so that everyone can get their bathrooms. Turns out, a competitor does the exact same thing but they sell their bathrooms for $9k. Add more competitors and the price will be very close to the cost of construction.

Now replace the bathroom with the entire house. Suddenly you realize something. It's very difficult to find land to build your new house and even if you did you would have to upzone the property by tearing an existing property down and building a 2-3 story multifamily home there. Unfortunately, doing this is illegal in many places and where it is legal permits are being denied for arbitrary reasons.

You can't tell me that construction companies can't make money off new construction because the cost of housing is too low.

This is incorrect.

I admit I misspoke, because of course, monetary policy controls interest rates, but I maintain that a change in affordability is not dominated by inflation but rather other social policies. Houses are twice is big and families are 20% smaller.

Happy to debate more but [citation needed].

[1] https://fee.org/articles/new-homes-today-have-twice-the-squa...

> Inflation adjusted

Inflation is a result of monetary policy. So when you’ve adjusted the price for the monetary policy, you see that 50 years of capital accumulation and efficiency has been soaked up by monetary policy.

> I admit I misspoke, because of course, monetary policy controls interest rates, but I maintain that a change in affordability is not dominated by inflation but rather other social policies. Houses are twice is big and families are 20% smaller.

Things are supposed to get cheaper as capital accumulates. Social policies undoubtedly have an effect. So does increasing the money supply. An increase in the number of currency units necessarily causes each unit to be worth less, ceteris paribus.

> Happy to debate more but [citation needed].

I’m not sure how to proceed. The notion that one could print money and have each currency unit correspond to the same amount of physical goods is prima facie false.

No, it's not, you're looking at half the equation. Value of money is a function of both supply and velocity. If velocity drops but supply increases commensurately, each unit of currency corresponds to the same amount of physical goods. [1]

This should be dead obvious to you, as the money supply doubled last year but the price of Apples went up 2%. Not 100%. Same with the entire CPI basket. Housing actually got cheaper. Rent went down a ton.

> Inflation is a result of monetary policy. So when you’ve adjusted the price for the monetary policy, you see that 50 years of capital accumulation and efficiency has been soaked up by monetary policy.

We are talking in constant dollars that have a 0% notional rate of inflation. That's what inflation-adjusted means in this context.

What do you mean by "50 years of capital accumulation"? People don't accumulate or hold dollars for exactly this reason. They accumulate and hold assets and value, whose performance matches or exceeds inflation.

> Things are supposed to get cheaper as capital accumulates. Social policies undoubtedly have an effect. So does increasing the money supply. An increase in the number of currency units necessarily causes each unit to be worth less, ceteris paribus.

I'm not sure what that means. Things aren't supposed to get anything as capital accumulates.

An increase in number of currency units may or may not cause each unit to be worth less, as velocity is the missing half of the equation. With that in mind the goal is each unit to be worth 2% less each year, to incentivize higher velocity of money and investment.

It's a straw man to say that your buying power drops 2% each year as a result of inflation. You're only penalized for inflation for the period between you receiving the dollars and using them to purchase assets whose performance exceeds inflation.

[1] https://www.investopedia.com/terms/v/velocity.asp

for consumer goods, “velocity” is the rate at which those goods are consumed. People aren’t generally choosing to starve themselves or pay rent on 4 apartments according to economic conditions.

i should have included “ceteris paribus” with my statement but I thought it was obviously implied.

> This should be dead obvious to you, as the money supply doubled last year but the price of Apples went up 2%. Not 100%. Same with the entire CPI basket. Housing actually got cheaper. Rent went down a ton.

Ceteris is not paribus. The increase in money supply soaked up all the decrease in prices people ‘should’ have experienced.

> We are talking in constant dollars that have a 0% notional rate of inflation. That's what inflation-adjusted means in this context.

I understand what “inflation-adjusted” means. Once you adjust for the price increase due to people’s dollars being worth less, the commodity costs the same. Of course people aren’t paying in notional inflation-adjusted dollars, they are paying in the actual dollars that have depreciated, so they end up paying more for less, because of monetary policy. The value they miss out on accrues to people who get the new money earlier.

> What do you mean by "50 years of capital accumulation"?

I mean that the capital stock of the economy has increased over the past 50 years as a result of people investing their surplus in capital goods. This results in increased productivity and (ceteris paribus) a lower real cost of goods and services.

> People don't accumulate or hold dollars for exactly this reason. They accumulate and hold assets and value, whose performance matches or exceeds inflation.

Yes, because monetary policy results in depreciation of fiat currency.

> I'm not sure what that means. Things aren't supposed to get anything as capital accumulates.

Things are supposed to get cheaper as capital accumulates because labor is more efficient when combined with tools, resulting in more outputs and the subsequent decrease in real price.

> An increase in number of currency units may or may not cause each unit to be worth less, as velocity is the missing half of the equation.

You’re missing the part where I said “ceteris paribus”, a commonly specified requirement for assertions about the connection between theory and economic reality.

> It's a straw man to say that your buying power drops 2% each year as a result of inflation. You're only penalized for inflation for the period between you receiving the dollars and using them to purchase assets whose performance exceeds inflation.

It’s not a strawman, its literally the case.

Additionally this requirement to invest dollars before they depreciate leads to asset prices skyrocketing without support from the underlying fundamentals. This leads to people who are already invested (the rich, the wealthy, the established old money, the upper class) gaining disproportionately, and new investors being priced out. Hence monetary policy is directly responsible for the rich getting richer and the poor being left behind.

The entire problem is that it's not false at all. There are various ways to produce more physical goods without employing more domestic workers. Every time the fed is printing money that money gets invested in a way that does not result in decreased unemployment. It's being used to produce more physical goods which keeps the price of physical goods constant.

Ultimately the only truly scarce "good" is labor. Everything derives from it. If prices are not rising that means labor is not scare at all, which is idiotic because there are lots of ways to productively deploy that labor.

I was unclear and I should have included ceteris paribus, but you’re correct. The fed keeps the price of goods constant when it should be decreasing.

> Ultimately the only truly scarce "good" is labor. Everything derives from it. If prices are not rising that means labor is not scare at all, which is idiotic because there are lots of ways to productively deploy that labor.

Raw materials are also truly scarce, and you’ve neglected to apply the same level of analysis here as you did above.

https://www.investopedia.com/articles/07/consumerpriceindex....

If 25% of circulating USD were created last year, and our economic value is the same or even diminished, wouldn't it follow that there must be significant inflation?

Not necessarily, no. The value of money is a function of supply and velocity. If the velocity went down and the supply went up 25% the fed can still nail its 2% target. [1, 2, 3] If the velocity increases next year the fed can shrink the supply commensurately to maintain its targets.

[1] https://www.investopedia.com/terms/v/velocity.asp

[2] https://www.stlouisfed.org/on-the-economy/2014/september/wha...

[3] https://www.investopedia.com/ask/answers/042015/how-does-mon...

It still seems to me that velocity can vary depending on the underlying entity. So unless every asset has the same velocity measure as the items in the CPI basket, it seems that there has to be some amount of inflation somewhere like possibly US equities.

How this interacts with assets is in my opinion not super clear. Pricing of assets is supply and demand, unlike the CPI basket. The CPI basket is based on human need. There's no human need for AAPL shares. However, there's a ton of stimulus money, and folks who remember 2008's V-shaped recovery, and a bunch of people stuck at home day trading. I think that's much more likely to be driving asset prices than supply. After all supply is enacted by changing lending parameters.

To the extent asset prices don't put pressure on CPI, they reflect an increase in welfare, not an increase in inflation.

ArcticBull below me shows up in EVERY single Bitcoin thread to trash talk Bitcoin. Here's where we are at; some love Bitcoin, and others show up just to talk trash. Bitcoin is only going to grow beyond $100k the next couple years regardless of how sourly "ArcticBull" wants to astroturf.

It becomes actually more expensive to buy anything in the present, as a result, consumers stop purchasing, and as a result economic activity decreases.

DigitalGold is also non-sensical, because that is simply designed to track against inflation, to prevent the loss of today's buying power tomorrow because of inflation. But when something appreciates 10,000x it's not really a hedge against inflation anymore, but a different speculative instrument entirely.

So what? My argument has never been about price but about fundamentals. The fundamentals are crap. I don't care if gets to $100K in the "next couple of years" and neither should you. The price going up doesn't make it good, the price going down doesn't make it bad.

Spending an Argentina of power for 7 tx/sec makes it horrifyingly bad.

Wanna make a 100% ROI? That's not that hard. Risky, but you can make one overnight if you spend some time on r/WallStreetBets.

Unless fiat is abolished, the price of something in BTC will always be pegged to USD. As USD devalues as a result of inflation, the price of a product in BTC decreases.

I don't see the difference between someone in Venezuela choosing to hold their net worth in BTC (which could halve at any moment), versus their native, rapid inflationary currency. Both are risky, but if the central bank sorted itself out and fixed the currency issue, no one will have any reason to hold BTC any more.

Either there is an incredible amount of criminal fraud behind this or... this is perfectly reasonable?

Except nobody can really explain or confirm why.

Daily volumes of tether trades are consistently a high multiple of the total supply. (Today it's 130bln vs 30bln.) So I don't know if it's safe to even trust that number.

As per Steins law, anything that cannot go on forever must eventually stop. Question is how long?

BTC is only volatile as not enough people use it. Further, if you stay on USD, every year a cappuccino will cost you more. Fractional reserve banking is practically a license to print USD. We're not funding the stimulus or really any of our government via tax anymore. Inflation is the real tax.

the USD is very much subject to social media and traditional news manipulation. When the US decides it wants a stimulus package or other types of debt, it drives down the dollar's value. Granted the US is good about making payments to creditors, i.e bonds, it is not immune to fluctuation.

It is sad but the way of the dollar is slipping and the global demand currency. It is slowly being replaced by the CNY and other market demands.

Lastly, the Treasury does not control the dollar. It the Foreign exchange markets. (https://www.fool.com/knowledge-center/who-determines-the-val...)

The reason the US dollar is "stable" is partially due to the fact that it is backed by the US government. It is a requirement that businesses operating in the US accept payment in US dollars. Until somewhere mandates that bitcoin _must_ be accepted, it will never truly be a currency, the same way that gold is not a currency, and the same way that wheat, or potash, or shares in GME is not a currency.

There's also a concept of "sticky" prices that most economists are quite familiar with - this assists in keeping the price of a coffee stable, whether or not technophiles accept it or not. Even if the price of the US dollar fell by 50% today, your coffee would still cost you around $2 or $3 tomorrow (assuming the coffee shop was even open).

People and businesses in the US have to pay the US government in US dollars, but there's no law requiring that a business accept any particular currency.[1][2]

That said, if you do try to make your own currency, the feds will find some way to shut you down.[3]

1. https://www.federalreserve.gov/faqs/currency_12772.htm

2. https://www.treasury.gov/resource-center/faqs/Currency/Pages...

3. https://www.forbes.com/sites/nathanlewis/2017/04/18/what-is-...

The fact that dollar or euro seem stable is only possible with the violent tempering of national banks and the like of IMF. They only seem stable.

Money as a measure of value for other goods is something that is crashing constantly and will continue to do so until we let go of of the crazy attempt to do so.

*no intended for you personally, just a good place to plug my two cents (pun intended)

I'd advise anyone to read some Mises or the Dao of Capital by Spitznagel, the book is whip smart and applicable to basically any endeavour.

Contrast that with bitcoin, where the value often changes by many, many cappuccino's in a single day.

I dont hold USD because it relatively loses in value for months and years now.

(I mean this in the dictionary sense of the word fiat that gives meaning to the phrase fiat currency. I don’t mean tether is supported by fiat currency)

I am totally on board a pegged crypto currency that tracks US dollar. For me and many others I presume, stability is far more important than anything else that crypto currencies have to offer.

IMO one of the most important properties of cryptocurrencies is that you only need to place trust in the code & that the miners are selfish.

The base futures contracts are 5 Bitcoin i.e. notional value of $200k, but that's merely an inconvenience and not a fundamental blocker to subdivide the futures contract or have someone do it for you.

I think for years payment companies like Bitpay have had price guarantees for merchants(probably using futures in the backend), but you do have more counterparty risk dealing with unregulated exchanges.

The US dollar provides stability and security over a very short timescale. It’s been inflating for decades (punishing dollar holders and waged/salaried workers) and based on the current political environment (insane dollar printing, “MMT” having political currency, etc.) there’s a substantial risk of serious dollar instability in the next few decades.

Or, in other words, what’s the point of having a stable currency if you can’t use it in smart contracts?

Get in on the ground floor of this opportunity, then convince all of your friends to buy in, then they convince all of their friends...

Once the speculation upside is gone, why would anyone want to buy Bitcoin? That’s the real question.

The reason people would want to buy bitcoin once it has grown out of its speculation is the vast marketplace of people and vendors who accept bitcoin as tender + the use of bitcoin as a hedge against the inflation of your local fiat currency.

It becomes another investment vehicle to diversify with.

Once the speculation upside is gone, you would use Bitcoin because it’s the best available reserve and settlement asset. What are your other options? Inflationary USD or Yuan? Few rational actors would prefer to hold those.

Investors don't have to choose between investing in Bitcoin or parking their money in cash.

The stock market, real estate, commodities, and other assets don't lose their value if USD inflates.

The narrative that the only two choices are to buy Bitcoin or lose out to inflation is a fiction designed to convince people to buy more Bitcoin. Bitcoin isn't the only investment option.

> Inflationary USD or Yuan? Few rational actors would prefer to hold those.

Evidence suggests otherwise.

lolz https://www.macrotrends.net/countries/USA/united-states/infl...

The real mystery is why the fed is committing to supply side economics in a demand starved economy. That's the exact opposite of what you should do.

Edit: I thought it was obvious, yet in response to comment below - theoretically to get real inflation one has to adjust the M3 for the growth of the total amount of "stuff" in the economy. As that growth is just 1-2%/year , the M3 shape is visually indistinguishable from the real inflation on any given time period of up to several years.

Hand-waving at money supply and "total amount of stuff" without reference to prices makes as much sense as arguing "Well obviously daily commutes were shorter in 2019 than 1919 because cars are much faster than horses. Just look at my chart of relative top speeds!"

> Inflation is the decline of purchasing power of a given currency over time.

https://www.economicshelp.org/macroeconomics/inflation/defin...

> A more exact definition of inflation is a sustained increase in the general price level in an economy. Inflation means an increase in the cost of living as the price of goods and services rise.

https://www.economicsonline.co.uk/Definitions/Inflation.html

> Inflation refers to a rise in the average level of prices sustained over time, which also corresponds to a fall in the internal (domestic) purchasing power of money.

There is stable coins which have held a consistent peg against the US dollar for a couple of years now. You get all the benefit of high APY yield (relative to a bank account) and none of the volatility of a Doge or a BTC.

Is that worth 2% of your net worth? You should read about optionality. You don't have to be poor if you understand risk.

I don't know, but for some reason people keep using USD. Even though in the long run BTC keeps growing and USD will only lose its value.

This move by MC seems at odds with their recent spat with Pornhub, but I would not be the first to accuse financial organisations of hypocrisy.