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There's no pyramid scheme. It's a hyped asset, to say the least, but there's no pyramid. Like a hyped startup, it doesn't do much yet, but it is promising, so p
by weddpros 9y ago
There's no pyramid scheme. It's a hyped asset, to say the least, but there's no pyramid. Like a hyped startup, it doesn't do much yet, but it is promising, so people buy it. It may be "worth" much or zero in the end, it all depends on the final outcomes.
It's also the easiest/cheapest/most open asset to trade (depending on where you trade).
In the long term, Bitcoin can be seen as a safe heaven in case of economic chaos, like gold, but way easier to buy and hold. It can also be seen as an interesting economic experiment: what if currency wasn't managed by a government? Or you can give trading a try for a few $$ as a gamble (with more chances of success than in a casino).
It's also a useful currency in some cases: I'm a "digital nomad" which my bank can't seem to understand. Getting my Debit Card to work online from a foreign country, with an ever changing phone number (they insist on using SMS as a 2FA), sounds like an obstacle to them, but not to BTC.
- 0bsidian 9y agoI think most of the people putting larger checks into Bitcoin are betting that it will become a store of value asset. Going from memory, a recent Bloomberg article called Bitcoin: "Gold for millennials". Or, similarly, Peter Thiel said recently [1]: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments." [1] https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter-thiel-says.html https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...
- romanovcode 9y agoAll people who are owning Bitcoin are betting.
- 0bsidian 9y agoAgreed, I was just trying to say that currently, one of the most popular investment theses for Bitcoin is "Gold for millennials", not "anonymous paypal" or "decentralised stripe".
- g09980 9y agoA post [1] shared a couple of days ago made a thesis that BTC price needs to grow for it to become a viable "store of value." Maybe this is what we are seeing. "Market cap size is critical for adoption of a store of value. It needs to be large enough to “fit” even very large amounts of fiat, ideally without affecting the market. Gold market cap is estimated at 7 trillion USD, which means that even the richest people can move all their assets into gold and not move the market. (At least one at a time. All of them at once will move the market big time). Bitcoin market cap of about 70B USD is not large enough for even one of the richest people on the planet. This implies that if the market cap does not grow, Bitcoin is likely to fail as store of value." [1] https://grisha.org/blog/2017/09/25/bitcoin-value-2/ https://grisha.org/blog/2017/09/25/bitcoin-value-2/
- jungans 9y agoFYI Bitcoin marketcap as of today is 120B USD but your point still holds.
- pbhjpbhj 9y agoUltimately that's true of any non-backed currency (and those too I suppose) isn't it, it's just the bet looks far safer for a country/region wide fiat currency. I wonder if much of the medium term success of Bitcoin has been because the money put in couldn't be laundered readily in any other way, so whilst Bitcoin is a relatively high risk the alternative was just to dump the money without a way to use it?
- grey-area 9y agoNo. People actually use other currencies as a medium of exchange first, and store of value second (usually they purchase assets to store value long term). Bitcoin is the other way round (at present at least).
- omgbananas 9y agoI save more than I spend, so wouldn't I be mainly using it as a store of value rather than a medium of exchange?
- seanmcdirmid 9y agoAre you investing your savings? No. Are you just holding it in a bank with little or no interest, then yes.
- kgwgk 9y agoEven holding it in a bank for low interest is investing. Using it as a store of value would be keeping it in your wallet or in a safe (as you would do with gold, for example).
- seanmcdirmid 9y agoNot really....not at these rates anyways. There isn’t much difference between putting your money in the bank or under your mattress, well, except for convenience and safety issues.
- weddpros 9y agoYou're always betting when you're investing. At least the odds are better than in a casino.
- wolco 9y agoIn some ways we all are but I think we are forgetting the most important aspect. Using it for payments. That utility use case is more important because at some point the price will go down
- Scea91 9y agoThat is the problem with deflation. People expect that their money will be worth more tomorrow so they are more reluctant to spend it.
- wolco 9y agoBut if you use it as a currency you exchange money for bitcoin as soon as possible and use it when required. Money is always increasing so you try to earn more.
- feedjoelpie 9y agoGold without millenia of collective psychology to give it staying power as a store of value once more useful, cheaper, and faster to transact cryptocurrencies get any uptake.
- dagaci 9y agoBitcoin isn't suffering from a lack of uptake, right now.
- mrhappyunhappy 9y agoThat’s why I got into bitcoin. It has far more potential as a global vault for store of value than a currency. I don’t expect it to ever function as efficient currency and don’t think that it really needs to given other crypto currency developments.
- countryqt30 9y agoLmao. "Bitcoin" and "safe heaven" in one sentence. You made my day. #thehypeisreal
- tixocloud 9y agoThe big risk for banks is that they need to know who you are and to a certain extent how to reach you if there ever was an investigation into your activities. That being said, is there a way for a bank to always contact you? A bank designed for digital nomads would be a very interesting proposition for me given I'm in banking and am looking to discover new models.
- weddpros 9y agoYes, I think KYC is a problem with digital nomadism. All things administrative become a huge burden when you're travelling full-time, rent a furnished house in a tourist location without utility bills, etc. Some banks are already trying to address such needs, like Monese (which I'm also using).
- IgorPartola 9y agoYou talk about a “final outcome” as if at some point we will all collectively say “great. We are done with Bitcoin and it is from now on and forever what it currently is.” That’s not going to happen. It may hit a period of more stability than it has now, but I highly doubt there will be a final outcome.
- weddpros 9y agoYou know what I mean... For a startup or for Bitcoin, people wonder "will it fly?". I do think BTC is flying, but some are still sceptical, despite a 100B market cap...
- jstanley 9y ago> Like a hyped startup, it doesn't do much yet It does plenty already. I live almost exclusively on Bitcoin. I only get income in Bitcoin, I pay with Bitcoin whenever possible, and I have a Bitcoin-funded debit card for when that's not possible.
- ataturk 9y agoWhich sounds impressive, but are you making at least $100K/yr US in Bitcoin?
- pawelwentpawel 9y agoDoes the company that you work for receive their income in Bitcoin too?
- weddpros 9y agoI do understand... maybe I wasn't clear enough: it will do more in the future! but it's not Facebook scale yet. Coinbase has 10M users, not 100M, not 1B. I do bet on BTC to change the world... so I pay in BTC when I can too!
- mattpk 9y agoWhy? At the moment this seems like hassle, and possibly more expensive due to txn fees.
- ataturk 9y agoExcept of course that none of what you said is proven and is merely speculative, much like all the so-called 'investment' in it. When all is said and done, we will have had a massive lesson in the madness of crowds, high-tech edition.
- pbhjpbhj 9y agoIt's like a pyramid scheme in that so long as people keep buying in on the hope of a profit you'll keep making more and more. As soon as people say "hang on this is a con" and convert to another currency then this factor of the supposed value of Bitcoin could deflate to zero. It's not formalised like a pyramid or MLM scheme but it has some of the same structure.
- buchanaf 9y agoA pyramid scheme involves some form of active (fraudulent) recruitment to help increase the price of the asset. Bitcoin doesn't have this. From what you described above, every single speculative/overinflated asset would be a pyramid scheme. That's not the case.
- pbhjpbhj 9y agoHave you bought some BTC, I made a killing on it, it's free money, get some now because after the fork you'll be able to bank at least 20% of your initial sum, ... The peons in pyramid schemese usually aren't committing fraud, they don't realise that they're in a scheme, they're not lying, they are really convinced that they found the money tree and if only people buy in it will bear fruit forever. I still think the analogy is useful.
- weddpros 9y agoForks are a corner case. As long as someone is willing to pay for the minority coin, why not sell it: the fact that someone is willing to pay for it makes it valuable. "The peons in Theranos didn't commit fraud, they didn't realise they were in a scheme, they were not lying, they were really convinced that they found the money tree and if only people buy in it will bear fruit forever". You can't call every company that has failed a pyramid scheme. You can't call every company that seeks funds through VC or IPO a pyramid scheme, yet they know that they'll only get rich if others buy in.
- zanny 9y agoIt is a bit of a fraud to claim bitcoin can ever replace fiat currencies, though. Its deflationary, has a fixed coin limit, is incredibly centralized, and its tx rate is awful and costs a ton to move any of it around the chain. The only value in bitcoin is in how much it exchanges for at this point, and that is definitionally a pyramid scheme, because current buy-ins need more adoption to drive the price up so they profit off their investment. 3% of all addresses control 97% of all coins. 0.01% of all addresses control 21% of all coins. And bitcoins mint rate is slowing every four years and almost 80% of all bitcoin that will ever exist already exists. Its absolutely a pyramid scheme. Early adopters were incentivized with large quantities of limited coins to persuade them to mine and participate when the value was low. Those really early wallets (circa 09-12) amassed over half of all bitcoin ever and are now worth extreme fortunes. Those fortunes are based on demand for BTC, demand for the tiny amounts actually left circulating. The real question is how much of that old money is actually dead - lost wallets and lost passwords - and how much is just waiting to cash out for absolute fortunes. All it would take is one early wallet carrying thousands of BTC to liquidate to cause a panic.
- sharemywin 9y agoI wouldn't keep a large portion of your "wealth" in it.
- mrhappyunhappy 9y agoJust wanted to echo your sentiment about banking on the go. I’m sad to say that the world is still not very friendly to borderless people. We have to jump through hoops and pay unnecessary fees just to do basic of tasks. Somehow a vast majority of people I deal with have a hard time grasping that you can work on the go or from home and that the cookie cutter 9-5 lifestyle is not the only lifestyle out there.