For example, if you say that bitcoin has 7 tps and even with lightning will take decades to onboard everyone, it will become a store of value that you are supposed to buy and hold for long term. But if you point out how bitcoin has crazy volatility, it may become a currency that you don’t hold, just use to transact.
People whip up whatever they need it to be to make an argument. Sometimes we call it a currency because we can use it to buy things, other times its an investment. To reliably fit in either of those buckets is exclusive. To be a currency you need to be a store of value that is not fluctuation a lot, this means its a terrible investment vehicle.
This is like calling the web “new” in 2005-2008 (depending on chosen start date).
The “new” excuses ran out a decade ago.
It can be seen as an investment by those who bet on a rise in demand for sovereign value, and can be seen as a currency by those who doubt the ability of fiat value to continue indefinitely.
And while there are indeed large currency markets, it is not very common on a population basis due to it being very much a speculators game requiring massive amounts of leverage for the average net worth.
If bitcoins had constant or decreasing value through time then people would be more willing to trade them. This is why deflation is so economically dangerous.
It did encourage mining, but that doesn’t driving long term adoption and has nearly purely negative consequences.
The ideal long term strategy for adoption would have mining to provide a consistent reward in real terms over a long timeframe, low costs and high transaction volumes, and for unused accounts to be charged a small fee. Bitcoin failed all of those which is why it’s never had significant adoption as a currency.
Yet there is no more successful digital currency on the planet. If you think you can make one with "better" rules please go ahead!
> This is why deflation is so economically dangerous.
The idea that inflation and constant spending are the only thing that makes an economy work is faith-based, and bitcoin was intentionally not started that way. So far I'd say it has worked quite well.
Back when people used precious metals for currency many different economies would all be tied to the same shifts in value. I don’t know all the details but there’s real world support for significant deflation being detrimental not just theory.
That said trivial levels of deflation aren’t harmful, but bitcoin had very extreme deflation.
> I don’t know all the details but there’s real world support for significant deflation being detrimental not just theory.
The problem is that the "real world support" is usually taken from fiat money economies that are entirely built on inflation, and for historical examples there usually was an economic crisis at the same time that was accompanied by deflation. It's hardly conclusive.
> an economic crisis at the time
In non fiat currencies you also get deflation from economic growth. Where you can study the effect is when the growth occurs outside of a given economy. Again, outside of my expertise it’s just something I have read.
That's fine though - if you have something that holds value you can move it into whatever currency exists when you need to do that.
Bitcoin only makes one relevant promise: There will only be 21 million. And that means that the people who are born poor get a chance at building wealth by not having the government constantly reduce the value of their money. Bitcoin is an escape from the system that keeps people poor.
Bitcoin never claimed to be and is not altruistic. And the same can be said about almost all investments, you need information early, you need to judge the information correctly, and you need to move in. Same with bitcoin.