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I 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 art

I 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 ago
All people who are owning Bitcoin are betting.
- 0bsidian 9y ago
  Agreed, 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 ago
    A 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 ago
      FYI Bitcoin marketcap as of today is 120B USD but your point still holds.
- pbhjpbhj 9y ago
  Ultimately 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 ago
    No. 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 ago
      I 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 ago
        Are you investing your savings? No. Are you just holding it in a bank with little or no interest, then yes.
        kgwgk 9y ago
        Even 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 ago
        Not 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 ago
  You're always betting when you're investing. At least the odds are better than in a casino.
- wolco 9y ago
  In 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 ago
    That 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 ago
      But 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 ago
Gold 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 ago
  Bitcoin isn't suffering from a lack of uptake, right now.
mrhappyunhappy 9y ago
That’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.

romanovcode 9y ago

All people who are owning Bitcoin are betting.

0bsidian 9y ago
Agreed, 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 ago
  A 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 ago
    FYI Bitcoin marketcap as of today is 120B USD but your point still holds.
pbhjpbhj 9y ago
Ultimately 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 ago
  No. 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 ago
    I 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 ago
      Are you investing your savings? No. Are you just holding it in a bank with little or no interest, then yes.
      - kgwgk 9y ago
        Even 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 ago
        Not 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 ago
You're always betting when you're investing. At least the odds are better than in a casino.
wolco 9y ago
In 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 ago
  That 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 ago
    But 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 ago

Gold 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 ago
Bitcoin isn't suffering from a lack of uptake, right now.

mrhappyunhappy 9y ago

That’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.