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You need some semblance of stability though. No one is going to agree to pay me 1 BTC per week if they're implicitly giving me a 30% raise in week 2. Just the s

You need some semblance of stability though. No one is going to agree to pay me 1 BTC per week if they're implicitly giving me a 30% raise in week 2. Just the same, I would not be happy to get paid in an extremely inflationary currency that meant I was taking a pay cut week over week. It has not shattered any belief in traditional currencies or governments for me. In fact, it has made me realize their value. People are just using it for speculation which makes it feel a lot more like a multi-level marketing scheme than a currency.

cgmg 9y ago
How does speculation make something a "multi-level marketing scheme"?
- TACIXAT 9y ago
  First, I should clear up some terms. I say speculation as a contrast to investing. Investing is when you have an understanding of something underlying value (or expected value) based on some financial fact (e.g. past profits). Speculation is when you purchase something and hope for it to go up in value. I see cryptocurrency prices largely driven by speculation. There is no underlying value that justifies the price. This means that the people purchasing cryptocurrencies today are relying on someone else purchasing it at a higher price tomorrow in order to make a profit. I might have used the term MLM incorrectly when what I meant was pyramid scheme.
  - sbenitoj 9y ago
    Isn't it possible that people are using cryptocurrencies as an alternative to restrictive fiat currencies and not just for speculative purposes? (Obviously people are also using them for speculation, but that doesn't mean that's the ONLY current use case.)
  - cgmg 9y ago
    > I might have used the term MLM incorrectly when what I meant was pyramid scheme. You are now using the term 'pyramid scheme' incorrectly. Out of curiosity, do you consider other objects of speculation, including stocks, bonds, futures, derivatives, commodities and real estate, to be 'pyramid schemes'?
sbenitoj 9y ago
People are using it for a lot more than speculation, including skirting capital controls imposed by crony bureacrats, buying goods and services that are "morally unacceptable" to puritanical politicians, and as a means of savings in countries where confiscating bank deposits is matter of course.
dfhdf5 9y ago
A currency which has gone from not existing 10 years ago to potentially being a world reserve currency is alway going to be ridiculously volatile as that transformation occurs. Volatility is reducing however. As the scale increases and the exact role that a currency will end up playing in the world becomes clear, so does its market cap. Amazon or google will never rapidly grow 100x in a few years again, and whichever crypto becomes the world reserve will have the same reduction in volatility as it scales.
sbenitoj 9y ago
It has not shattered any belief in traditional currencies YET -- give it a few more decades and a few more financial crises caused by incessant money printing and fake credit expansion and I suspect things will look quite different.

cgmg 9y ago

How does speculation make something a "multi-level marketing scheme"?

TACIXAT 9y ago
First, I should clear up some terms. I say speculation as a contrast to investing. Investing is when you have an understanding of something underlying value (or expected value) based on some financial fact (e.g. past profits). Speculation is when you purchase something and hope for it to go up in value. I see cryptocurrency prices largely driven by speculation. There is no underlying value that justifies the price. This means that the people purchasing cryptocurrencies today are relying on someone else purchasing it at a higher price tomorrow in order to make a profit. I might have used the term MLM incorrectly when what I meant was pyramid scheme.
- sbenitoj 9y ago
  Isn't it possible that people are using cryptocurrencies as an alternative to restrictive fiat currencies and not just for speculative purposes? (Obviously people are also using them for speculation, but that doesn't mean that's the ONLY current use case.)
- cgmg 9y ago
  > I might have used the term MLM incorrectly when what I meant was pyramid scheme. You are now using the term 'pyramid scheme' incorrectly. Out of curiosity, do you consider other objects of speculation, including stocks, bonds, futures, derivatives, commodities and real estate, to be 'pyramid schemes'?

sbenitoj 9y ago

People are using it for a lot more than speculation, including skirting capital controls imposed by crony bureacrats, buying goods and services that are "morally unacceptable" to puritanical politicians, and as a means of savings in countries where confiscating bank deposits is matter of course.

dfhdf5 9y ago

A currency which has gone from not existing 10 years ago to potentially being a world reserve currency is alway going to be ridiculously volatile as that transformation occurs. Volatility is reducing however. As the scale increases and the exact role that a currency will end up playing in the world becomes clear, so does its market cap. Amazon or google will never rapidly grow 100x in a few years again, and whichever crypto becomes the world reserve will have the same reduction in volatility as it scales.

sbenitoj 9y ago

It has not shattered any belief in traditional currencies YET -- give it a few more decades and a few more financial crises caused by incessant money printing and fake credit expansion and I suspect things will look quite different.