Money corrupts; bitcoin corrupts absolutely. Disregarding all of bitcoin's shortcomings, a financial instrument that brings out the worst in people—greed—won't change the world for the better. https://www.cynicusrex.com/file/cryptocultscience.html.
I used time-travel to uncover three secret messages hidden in a popular Bitcoin meme – “This meme is designed to exploit a number of weaknesses in our understanding of money, and to play on our fears. I’m going to show you how it does it, and why.” https://brettscott.substack.com/p/bitcoin-meme-time-travel.
Prosperity boils down to good policy and governance. Thus, good people. Unfortunately, as far as I've seen, cryptocurrencies have produced some of the worst kind of people.
Bitcoin and cryptocurrencies in general are pyramid schemes. They deserve no place in the economy.
There's def crypto communities that dream of paying everyone a basic income in their currency, identifying each individual and not completing devaluing the coin are big problems though
I don’t see why governments wouldn’t tax Bitcoin income and transactions the same way as fiat income and transactions. Me paying someone a hundred dollar bill is even less taxable than Bitcoin.
Obviously everything will sound dystopian if you take it to the extreme.
Disagree. In the current system it takes an enormous effort for the majority to suppress individually profitable but socially harmful activities (like bribery), but it can be done; many developed countries achieve quite low levels of corruption. Bitcoin makes that a lot harder, by design.
The usefulness of gold itself is questionable:
* https://www.pwlcapital.com/will-gold-save-the-day/
* https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2078535
- Boom/bust cycles means you’re at high risk of not being able to withdraw without losing most of your value - There’s no regulation of reserves in other more tangible values behind the currency - Bitcoin has no value to others not holding Bitcoin. Gold and art still has value to others not holding it. That is, I’d be willing to buy gold or art at a certain price for their practical or esthetical use, not just as an investment scheme. This puts a more solid barrier for how low the price of these assets can go. - The future regulation of cryptocurrencies is highly uncertain. Just look at India. I have no doubt that other countries will follow. Most likely there will be regulations requiring reserves behind cryptocurrencies. There’s not much reason to think that governments will be cool with printing money with zero reserves in the long term just because they’re printed by algorithms. It’s not allowed for banks, why should cryptocurrencies be treated differently?
Bitcoin is a high-risk high-reward investment scheme. A pretty good one so far. Nothing wrong with that. It’s absolutely not a store of value.
For esthetical use, wouldn't an inexpensive fake gold work just as well, as long as its appearance was substantially the same? Not many people are interested in buying fake gold, of course, but I think that's a matter of wealth/status rather than aesthetics.
I think the demand for white gold and rose gold also suggests that interest in gold jewelry is largely about wealth/status. Even "gold gold" jewelry is usually mixed with lighter metals in order to intentionally change its appearance. (Of course it's also to strengthen the material, but that could be done while maintaining the approximate color if people truly liked the color.)
Gold will have its place as an analog store of value. But you are simply missing the point about how to evaluate a digital store of value. Think about which digital properties a digital store of value would need to have, since concepts like density and chemical stability are literally useless to evaluate a digital entity against; once you have a list of digital characteristics that define what a digital store of value would need to have, you can start to check your checklist against the properties of Bitcoin (or other cryptocurrency if you want)... I'm not saying you'll automatically be convinced, but you should at least use the right checklist to compare.
Outside of this extreme case, a currency is much better store of value because it comes with the bonus of liquidity. Sure fiat currency may lose its value to inflation, and Bitcoin may rise 50x, but that's actually a benefit of fiat.
Money is really just a credit for your contributions to society that society now owes back to you. The value of your contribution to society decays over time, so it makes sense that the value of your money should do so as well. You're now incentivized to "rent out" the credit society owes back to you to someone who needs it more than you, for example, a young family buying their first house. This is in essence what a loan is.
Had your money/store of value been sitting idly, it wouldn't be able to help anyone. This is the problem with Bitcoin. Loans and investment become extremely risky. It's impossible for everyone to pay back interest successfully when there are a fixed number of Bitcoins, so instead people are incentivized to hoard them. In a broader sense, by "holding value," you're holding back societal contributions for the future when these contributions could reap benefits right now. That's not something anyone should be rewarded for.
Given that storing value is a net negative for society, there's the question of where the additional value of Bitcoin is coming from. Part of it was due to the devaluation of the dollar, but that can't explain all of it. Maybe it has some unrealized potential to become a currency outside of government control, but that's something that was rejected in the original comment I replied to. This means that the value of Bitcoin is being leeched from outside. I think that people will collectively realize this, which will cause Bitcoin to crash.
Who actually buys gold to store value?
Convertibility to fiat is kind of a low priority for a store of value. Auditability, barriers to rehypothication, and ability to self custody are probably much more important for a store of value.
So being a better store of value than gold isn't hard.
Housing is sometimes a store of value. Bitcoin is probably more liquid, and way less of a hassle than some housing. Expect some of that to move over.
Fine art is primarily a store of value. A lot of it sits in airport warehouses. Bitcoin is just as scarce, but much more convenient.
Stocks are certainly being used as stores of value for many people. At some point, Bitcoin will become more reliable than index funds.
Idk much about bonds, but I'm sure some of that will flow to Bitcoin, as bonds become a less attractive investment.
If people can't sell isn't that positive for the price? The whole 'hodl' thing is to stop people cashing out. Since crypto has no inherent value, the price is reliant on more people cashing in than out.
This seems destined to go about as well as all the Spanish and Portuguese who plundered the New World for centuries in their attempts to hoard real gold as their empire faded into the dustbin of history and mercantilism and then capitalism took over and the world realized actual wealth involved making useful things, not holding onto deflationary fixed supply assets for dear life.
JP Morgan is on board, now advising their investors to join in (and the bank behind Coinbase)
Fidelity is on board
Morgan Stanley is on board
Visa, MasterCard
AMEX has been using crypto to get best possible currency exchange rates for a couple years
Coinbase has a healthy relationship with the SEC and is about to get their banking charter approved for their own direct FDIC insurance, as well as IPO soon
Getting money out is NOT hard.
This is not a meme.
Fidelity: Provides custody services for a fee, hasnt directly invested
Morgan Stanley: Provides custody services for a fee, hasnt directly invested
Visa, MasterCard: have made some press releases, but dont appear to actually do anything yet
AMEX has been using crypto to get best possible currency exchange rates for a couple years: source? couldnt find any evidence of this
Coinbase has a healthy relationship with the SEC: healthy enough to earn them a $6.5M fine for illegal wash trading yesterday
That value add is that it’s scarce, and its scarcity is unlikely to be tampered with. This means people don’t have to jump through hoops to keep up with inflation. That’s it.
They completely control consensus when it comes to transaction ordering, but for other network parameters like emission rate, they don't have any control. If they decided to bump block rewards by 2x none of the blocks would be accepted by exchanges or merchants, and it would effectively be a hard fork. Segwit2x had majority miner support but failed because it couldn't get enough community support.
"Compliance measures on crypto-currency are expensive. We'll be charging a 3% compliance tax on all crypto-currency holdings, and we'll do this via any US-registered crypto-brokers charging a withholding tax unless you can prove it's double-taxation; also any failure to pay this is tax evasion and will be prosecuted as such"
you'll see some hard forks. Also this is a _great_ idea as it increases tax revenue, increases investment in US bonds and stocks, _and_ it suddenly swells the value of US Govt gold reserves.
but yes, there are other (actual) cryptocurrencies* that don't broadcast every detail about your transactions, which can be used for that.
*crypto- comes from the Greek kryptós, meaning “hidden.”
Bitcoin will never be used directly for payments, it's a value store. Immutable deflationary digital gold.
I wrote it off for years too because it was too slow and the fees were too expensive. That was the dream they had, but they couldn't realize it at the base layer. I was still walking around last year believing that's the scam they were still peddling, but once you take time to investigate you'll see it will become a major part of the world economy.
COVID helped push this over as bailouts and printing money in the US and the ECB is going to drive a massive movement of money out of the markets and fiat.
Normally you'd see momentum go to bonds when the stocks burst but the bonds situation is unsalvagable.
Also expect a ton of movement to crypto when wealth taxes get implemented to fix economies. They'll use it to hide assets, guaranteed. Form an LLC, siphon the money out that way and into crypto.