diegocerdan
> You call bitcoin a SoV but further down describe it as a form of money. The primary functions which distinguish money are as a Medium of Exchange, a Unit of Account, a Store of Value: https://en.wikipedia.org/wiki/Money
> I'd like to read a bit more about what defines "better" in your opinion. There is definitely a list of features but I would argue that being hard money is the most important feature. Meaning hard/sound where the nominal amount of money does not change.
Bitcoin in definitely hard but Ethereum does even better by being deflationary. As network transactions are slowly reducing the total amount in circulation.
Other nice features of Bitcoin/Ethereum vs Gold/Dollar are: digital, non-seizable and no third party risk.
Gold... what if this common belief can be upgraded to a better form of money?
Bitcoin is energy quite energy intense and slow in the number of transactions but gold has many drawbacks too! It's a heavy rock, can't be easily split for payments, you have to spend efforts in custody and can't be transferred digitally.
Bitcoin... what if this common belief can be upgraded to a better form of money?
Ethereum is way more complex than Bitcoin but solves through clever engineering most of it's drawbacks. Let the Market decide which form of money is best.
The world was fine till governments decided to operate without hard money as first settlement layer.
We are going to revert back. It _has_ to be fixed.
Does the existence of Bitcoin allow better coordination such that the global productivy raises 2%?
And I would with no doubt answer: YES.
Central Banks are distorting the function of Money and bringing economies to their knees. A decentralized and digital form of Money would force the system to self-heal.
Luckly for the working class, nowadays everybody can invest with a cheap smartphone and their little capital thus there is nobody to rob from and the system collapses.
By investing you are giving somebody money that when used will make access to those bought resources more expensive to other agents.
That is why in the perfect system you don't want to put "all money to work". You want the perfect balance between investing and saving.
Savings allow you to preserve your value into the future till you detect a worthy investing opportunity.
Sadly enough, the present world has lost most important tools to save and preserve value: money and government bonds. Thus obliging all agents with value into risky investing instead of safely save for the future.
The situation explains why gold and Bitcoin soared last decade: economic agents need some store of value to park their savings.
If you buy in the present what others want to own in the future, you create value for yourself as the price of the asset rises.
You can also understand Bitcoin as a business. Assuming it's a better form of money, it allows any agent of the system to better store or transfer money.
By owning Bitcoin you are assuming a risk, but also making the total value locked (TVL) bigger, through making the token less volatile. That helps. :-)
Are the rewards desirable? That's an interesting discusion.
Historically, it has allowed humanity to switch to better forms of money: https://en.wikipedia.org/wiki/Gresham's_law
I agree with your description of the present and close past, thus calling an imminent bull market.
The more time this present situation holds, the bigger is the buying pressure.
I'm guessing you have a computer tech background and still don't share my view: imagine all the macro-investors not having this knowledge. They can't predict magic-internet-money eating their lunch.
Cool thing about free markets: they find out the correct solution out of the greed and collective inteligence of the group. <3
Not all value can be invested in the present, thus people want to invest in the future (savings theory).
If governments do not offer fiat money or bonds as savings vehicle, assets like Gold or Bitcoin will inevitable soar.
MicroStrategy, and others, understand the situation and want to get in early to make multiply their actual savings.
I would agree that dollars have little downside but the purchasing power degradation of dollars feels like a irremediable tax on savings. And hard money like gold, silver, Bitcoin or Ethereum a quite decent hedge.
We don't see shopping cart inflation because it's countered by the technological cheapening of the production. And the key fact that new money is not being given to people buying groceries.
People avoid holding money by buying stocks and housing, not because of natural P/E ratio but forced by the continuously devaluation of cash.
What "money" do you expect businesses want to hold in this situation?
To solve proof-of-work consuming too much electricity, Ethereum is upgrading to proof-of-stake which is on the roadmap and consumes a negligible amount of power.
Some people may not be able to code but others are not even able to argue.
And the more they hold, the better for the community as a whole as they have more at stake for the project to succeed.
Your premise to dismiss cryptocurrencies is that you don't believe I'm gonna be able to keep using these three functions in the future. We had cryptocurrencies close to 10 years and the next 10 years just look brighter than the last.
Once you have "so many customers" it makes it easier for the rest of the world to join the revolution. Buying an asset with similar characteristics as gold but safely stored anywhere you can write a number (even your brain) and being able to transact with extremely low fees (making micro-transactions possible) without third parties in matter of milliseconds.
Crytocurrencies and blockchain technologies will change the world as we know it right now, enabling a new Internet layer to transact value and not only information. The single big question that arises is if current implementations are the "MySpace or Facebook" of blockchain. Will they succeed or do we need a second generation of tech? Only time can answer that question. My gut feeling is that the better open source implementation will evolve and take the lead.
And being created that way brings to the table all the benefits of classic open source projects. Anybody can download Ethereum and fork it. You may chose for a different approach to solve scaling and I could write code to improve my smart contract execution. On the long run the best project wins, or even both can coexist like thousands of other open source implementations.