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Why does volume matter? BTC is failing as a currency because it's in a speculating bubble. So, volume is just BTC circulating among traders and storage systems,

Why does volume matter? BTC is failing as a currency because it's in a speculating bubble. So, volume is just BTC circulating among traders and storage systems, not being used for anything.

peteretep 9y ago
> BTC is failing as a currency because > it's in a speculating bubble This feels pretty inevitable. There's no reliable tie to any economic activity, virtually no raw materials are priced in Bitcoin, and there's no central institution that can price stabilize, so pricing anything in Bitcoin (rather than: x USD/EUR/GBP/whatever as Bitcoin) seems a long way off. It's also -- comparative to fiat or commodities -- massively untested, so price shocks seem inevitable. Regulatory or technical risks that could reduce (or massively inflate) the value seem almost certain.
- ActsJuvenile 9y ago
  Apparently Bitcoin is trying to re-position itself as Digital Gold instead of currency now. https://multicoin.capital/2017/09/21/bitcoin-better-digital-gold/ https://multicoin.capital/2017/09/21/bitcoin-better-digital-... https://medium.com/@tuurdemeester/bitcoin-digital-gold-or-digital-cash-both-382a346e6c79 https://medium.com/@tuurdemeester/bitcoin-digital-gold-or-di...
  - umanwizard 9y ago
    What does it mean that "Bitcoin is trying to re-position itself" ? There is no central "Bitcoin" organization, and the only person who might have been able to speak with authority about the goals of the project hasn't been heard from in years.
  - kobeya 9y ago
    Bitcoin was always digital gold. That was it’s value proposition from the beginning: a return to the gold standard, in digital form.
pfisch 9y ago
If I was going to pay you 100k, would you rather receive it in btc or yuan? You are a chinese citizen in this scenario.
- CamTin 9y ago
  If you have the means to manage offshore funds, you'd want it in BTC so you can stash it somewhere outside China. If you're an ordinary Chinese dude, you'd want it in Yuan since that's the only thing you can spend.
mrb 9y ago
> not being used for anything That is a common misconception on HN, almost repeated on every Bitcoin thread. There is, in fact, evidence usage for payments is sharply increasing: https://blog.bitpay.com/bitpay-growth-2017/ https://blog.bitpay.com/bitpay-growth-2017/
- bduerst 9y ago
  Transactions != Payments The increases in transactions are due to HFTs speculating: https://www.bloomberg.com/news/articles/2017-01-16/high-speed-traders-are-taking-over-bitcoin-as-easy-money-beckons https://www.bloomberg.com/news/articles/2017-01-16/high-spee... Also, 70% of bitcoins won't be moved for 6+ months, making it more speculative than currency: https://www.coindesk.com/analysis-around-70-bitcoins-dormant-least-six-months/ https://www.coindesk.com/analysis-around-70-bitcoins-dormant...
  - kss238 9y ago
    Did you read the webpage? BitPay is a payment processor. They mention the increase in total BTC transactions but it focuses on their growth as a payment processor
    - bduerst 9y ago
      They're converting Bitcoins to USD and back again, which is HFT activity. People are not using it to make payments to people but converting it to/from other currencies, which is speculative and not currency behavior.
      - wc- 9y ago
        Bitpay is a payment processor, they receive bitcoin on behalf of a store, and then give the store USD or EURO or whatever. When Bitpay says their activity has gone up, that means more bitcoin is being used to pay for real goods, services, etc. Please go back and read the article, or just look at their homepage...
dlwdlw 9y ago
I think btc is being more and more recognized as a store of value rather than a currency. Gold/stocks also fail as currencies and are also prone to speculation bubbles.
- eldavido 9y ago
  Funny, that's exactly opposite of my perception. It seems too volatile to use as a unit of account or store of value, but almost perfect as a medium of exchange.
  - joshfraser 9y ago
    Are we looking at the same charts? https://coinmarketcap.com/currencies/bitcoin/ https://coinmarketcap.com/currencies/bitcoin/
  - kobeya 9y ago
    Mediums of exchange need to encourage usage, not hoarding.
    - nsomaru 9y ago
      Here's an interesting thought: you need a certain amount of liquidity to overcome the liquidity premium (https://www.investopedia.com/terms/l/liquiditypremium.asp https://www.investopedia.com/terms/l/liquiditypremium.asp). However, if the velocity of your asset is too high (nobody has incentive to HODL), then your asset becomes a medium of exchange because nobody wants to hold it due to price risk relative to fiat. So the best digital currency is one that is valuable to be _held_ but still has high transaction counts. The article that stimulated my thoughts on the matter: https://docs.google.com/document/d/1-ix9BDmGie8tPAwrfRKqe9CNUDnakmiwoh7tHfXeV9g/mobilebasic https://docs.google.com/document/d/1-ix9BDmGie8tPAwrfRKqe9CN...
      - kobeya 9y ago
        Do you mean something other than velocity? It doesn’t make sense I’m hat context. (I’m not opening a google doc for security reasons).

Why does volume matter? BTC is failing as a currency because it's in a speculating bubble. So, volume is just BTC circulating among traders and storage systems, not being used for anything.

peteretep 9y ago

> BTC is failing as a currency because > it's in a speculating bubble This feels pretty inevitable. There's no reliable tie to any economic activity, virtually no raw materials are priced in Bitcoin, and there's no central institution that can price stabilize, so pricing anything in Bitcoin (rather than: x USD/EUR/GBP/whatever as Bitcoin) seems a long way off. It's also -- comparative to fiat or commodities -- massively untested, so price shocks seem inevitable. Regulatory or technical risks that could reduce (or massively inflate) the value seem almost certain.

ActsJuvenile 9y ago
Apparently Bitcoin is trying to re-position itself as Digital Gold instead of currency now. https://multicoin.capital/2017/09/21/bitcoin-better-digital-gold/ https://multicoin.capital/2017/09/21/bitcoin-better-digital-... https://medium.com/@tuurdemeester/bitcoin-digital-gold-or-digital-cash-both-382a346e6c79 https://medium.com/@tuurdemeester/bitcoin-digital-gold-or-di...
- umanwizard 9y ago
  What does it mean that "Bitcoin is trying to re-position itself" ? There is no central "Bitcoin" organization, and the only person who might have been able to speak with authority about the goals of the project hasn't been heard from in years.
- kobeya 9y ago
  Bitcoin was always digital gold. That was it’s value proposition from the beginning: a return to the gold standard, in digital form.

pfisch 9y ago

If I was going to pay you 100k, would you rather receive it in btc or yuan? You are a chinese citizen in this scenario.

CamTin 9y ago
If you have the means to manage offshore funds, you'd want it in BTC so you can stash it somewhere outside China. If you're an ordinary Chinese dude, you'd want it in Yuan since that's the only thing you can spend.

mrb 9y ago

> not being used for anything That is a common misconception on HN, almost repeated on every Bitcoin thread. There is, in fact, evidence usage for payments is sharply increasing: https://blog.bitpay.com/bitpay-growth-2017/ https://blog.bitpay.com/bitpay-growth-2017/

bduerst 9y ago
Transactions != Payments The increases in transactions are due to HFTs speculating: https://www.bloomberg.com/news/articles/2017-01-16/high-speed-traders-are-taking-over-bitcoin-as-easy-money-beckons https://www.bloomberg.com/news/articles/2017-01-16/high-spee... Also, 70% of bitcoins won't be moved for 6+ months, making it more speculative than currency: https://www.coindesk.com/analysis-around-70-bitcoins-dormant-least-six-months/ https://www.coindesk.com/analysis-around-70-bitcoins-dormant...
- kss238 9y ago
  Did you read the webpage? BitPay is a payment processor. They mention the increase in total BTC transactions but it focuses on their growth as a payment processor
  - bduerst 9y ago
    They're converting Bitcoins to USD and back again, which is HFT activity. People are not using it to make payments to people but converting it to/from other currencies, which is speculative and not currency behavior.
    - wc- 9y ago
      Bitpay is a payment processor, they receive bitcoin on behalf of a store, and then give the store USD or EURO or whatever. When Bitpay says their activity has gone up, that means more bitcoin is being used to pay for real goods, services, etc. Please go back and read the article, or just look at their homepage...

dlwdlw 9y ago

I think btc is being more and more recognized as a store of value rather than a currency. Gold/stocks also fail as currencies and are also prone to speculation bubbles.

eldavido 9y ago
Funny, that's exactly opposite of my perception. It seems too volatile to use as a unit of account or store of value, but almost perfect as a medium of exchange.
- joshfraser 9y ago
  Are we looking at the same charts? https://coinmarketcap.com/currencies/bitcoin/ https://coinmarketcap.com/currencies/bitcoin/
- kobeya 9y ago
  Mediums of exchange need to encourage usage, not hoarding.
  - nsomaru 9y ago
    Here's an interesting thought: you need a certain amount of liquidity to overcome the liquidity premium (https://www.investopedia.com/terms/l/liquiditypremium.asp https://www.investopedia.com/terms/l/liquiditypremium.asp). However, if the velocity of your asset is too high (nobody has incentive to HODL), then your asset becomes a medium of exchange because nobody wants to hold it due to price risk relative to fiat. So the best digital currency is one that is valuable to be _held_ but still has high transaction counts. The article that stimulated my thoughts on the matter: https://docs.google.com/document/d/1-ix9BDmGie8tPAwrfRKqe9CNUDnakmiwoh7tHfXeV9g/mobilebasic https://docs.google.com/document/d/1-ix9BDmGie8tPAwrfRKqe9CN...
    - kobeya 9y ago
      Do you mean something other than velocity? It doesn’t make sense I’m hat context. (I’m not opening a google doc for security reasons).