Exactly. Its not so much a currency as a tulip bulb, or a ponzi scheme, or something new that has the worst features of all those.

I don't think of it as currency but as an asset, like gold. I refer to it as digital gold. Assets are not ideal for currency because overall they inflate in value (deflation), which discourages spend. Currency is designed to deflate in value (inflation), albeit at a controlled rate, to encourage spend. That's why you don't want to keep an excess of money in the bank - you want to move that money which deflates in value to assets which inflate in value - you want to buy gold, stocks, real estate, digital gold (cryptocurrency) and stuff like that.

The confusion of treating an asset such as bitcoin as currency is it's fluidity - which is just a measure of how easy it is to convert currency into an asset and an asset into currency. Stocks, for example, have an extremely high fluidity, which also contributes somewhat to their variability. Real estate on the other hand has a very low fluidity (historically speaking anyway, today's market notwithstanding). No one thinks of purchasing goods and services with stocks, nor should you think of purchasing goods and services with bitcoin.

Viewed in that light bitcoin is actually something that's quite familiar: gold. It's digital gold. Now is it good to invest in such an asset? That's another question we can tackle on another day!

As a Dutch person I can attest tulips have an actual purpose. And worth- the flower business is worth billions every year.

>tulips have an actual purpose

As a 1/4 Dutch person I can attest tulips hang around for decades doing nothing while being completely ignored.

The tulip bulb mania story is an incredibly persistent but inaccurate myth.

The “debunking” of Tulip Mania has, itself, been thoroughly debunked:

https://fee.org/articles/tulip-mania-not-a-myth/

Plenty of financial records still exist from back then. Tulip bulb mania actually happened.

That article doesn't debunk anything lol Goldgar's points are still just as valid.

> cryptocurrency is pretty much worthless to use as currency.

I agree. I used to think that this would decrease its value, but that hasn’t happened.

There are crypto pegged to specific currencies, like USD, but the transaction fees are so high that it’s still not useful to use as currency unless I have lots of really high transaction values.

I don’t have crypto holdings but, for example, since Tether is traded on ethereum there’s a $21[0] fee for any transaction.

This may be worse than the fluctuation problem since a $21 fee on any purchases wouldn’t work for me. Comparing the fees on using a check or cash, this sucks.

I suppose this gets competitive with visa/MC, if I assume a 3% fee, around $700.

[0] https://ycharts.com/indicators/ethereum_average_transaction_...

Crypto has a few stable coins

Currency is a broad term, like service. Like many broad terms, it is often misused and that leads to the broader meaning. Currency can be used for different things. In one meaning, currency is a tradable and stable store of value. This used to mean it was backed by some recognized valuable commodity, such as gold, but that is no longer the case. In another meaning, currency is a thing that is traded and has an expectation of growing value over time. The more proper term for that is an investment property. Bitcoin is not (yet) the first type of currency, it is the second type.

It's an investment. Detractors cite electricity usage, but overall it uses much less electricity than the traditional banking system. Also, the value of the second type of currency is only the value that people believe it has in their transactions, which is no different than the US Dollar. Since we went off the gold standard, the US dollar only has the value we believe it has. Part of that belief is that the US Dollar is rightly a bit more stable because it is artificially manipulated by the FED to control inflation.

> Detractors cite electricity usage, but overall it uses much less electricity than the traditional banking system

The traditional banking handles thousands of transfer per seconds, and many many many more assets and assets types than bitcoin. All things that bitcoin is not able - nor designed to - handle.

It's like saying that F1 engine are consuming less gas than trucks. It's only valid if you only look at it from a very specific angle. Sure, in total trucks are consuming more than F1, but both in consumption per km and in versatility, trucks win. F1 engines are not ready - nor designed to - be a suitable replacement for trucks engines.

Bitcoin and cryptos consume order of magnitude more electricity than the traditional banking system if you put them in equal terms. It's only logical since one is supposed to work in zero-trust environments while the other doesn't.

>Currency is a broad term, like service. Like many broad terms, it is often misused and that leads to the broader meaning. Currency can be used for different things.

No? A currency is a medium of exchange for goods and services.

The secondary meaning that you're attempting to allocate to "currency" is already amply described by the word "asset".

The two are not the same, and assets are not meaningfully regarded as proto-currencies in the way you suggest.

>In another meaning, currency is a thing that is traded and has an expectation of growing value over time.

What? A painting is currency? A house is currency? No.

If used as such, yes they are. In other cultures things such as beads, neck rings, shells have all been used as currency. In modern times diamonds are used as currency, and in some illicit circles so are paintings or other artwork.

No, not really.

Paintings aren’t used as currency, they are used as assets or stores of value.

Similarly, diamonds are pretty rarely used to actually transact and are rather just asset stores. It goes cash->diamond->cash; not cash->diamond->something else.

Anything can be traded or bartered that doesn’t make it currency. Some cultures used beads and shells and stuff but don’t any more. That doesn’t make beads currency.