7 ms·

Bitcoin World’s 30th Largest Currency, Market Cap Closes on Mastercard

31 points by golangnews 9y ago

zokeia 9y ago
I honestly do not understand how this market cap comparison argument is useful in assessing the viability of Bitcoin.
- gonvaled 9y ago
  As a value store? Clearly because of exposure. As a vehicle for trade? Not there yet, we need more adoption, aided by exposure.
  - joosters 9y ago
    Isn't the exposure making people less likely to trade? No-one wants to spend bitcoins because they're afraid they'll grow in value and they will have wasted money.
    - gonvaled 9y ago
      But people are trading all the time. The exchanges prove that: as many bitcoins bought as sold! :) Will the buyers be willing to use those bitcoins to buy other things than fiat currencies? Once more products are sold in btc, why not?
  - osrec 9y ago
    Funnily enough, my grandparents were telling me about how they were suspicious of debit/credit cards when they first started. Now of course, they feel very comfortable using them. Not directly comparable with bitcoin, but interesting in the sense that it was a significant paradigm shift in the way money was spent - initially met with skepticism, but eventually it caught on.
docdeek 9y ago
One key difference right now, though, is that I can use my Mastercard to pay for just about anythying just about anywhere I happen to be. In comparison to this worldwide acceptance as a means of payment, BTC seems just about worthless.
- iagooar 9y ago
  BTC is the gold of cryptocurrency. Bitcoin's strength is not being a practical payment system. Instead, with Bitcoin, you can trade with any other currency.
- gonvaled 9y ago
  Perfectly right. This will only change if several factors converge to create the right conditions. One big factor would be a new "Google" of bitcoin, namely a disruptive new entry in the payements space, marketing BTC for the end user and threatening the incumbents to the point of forcing them to drop barriers to entry, and even start adopting the new technology.
- mfrommil 9y ago
  True, however BTC isn't that different from a credit card in terms of liquidity. Plastic is accepted at more merchants, BTC can be digitally cashed in anytime with only a short delay.
- mmjaa 9y ago
  I've got two credit cards, a Visa and a MasterCard, both of them backed by my Bitcoin wallet. Where's the problem? I can pay with Bitcoin anywhere I could've paid with Visa/Mastercard .. this isn't about BtC vs. Visa/Mastercard. Its about BtC vs. US$, &etc.
  - qplex 9y ago
    What you are saying is that "I can pay with currency $x anywhere, I just need to exchange it first" If you use Visa/MasterCard, you will not pay _in_ BTC but in dollars/euros/whatever.
empath75 9y ago
The price of bitcoin is totally fraudulent, driven by a couple of exchanges literally printing money, and gullible people doing arbitrage and exchanging bitcoin for tether.
- makomk 9y ago
  The current price increase was driven almost entirely by a major US-based exchange which doesn't accept tether and has fairly substantial volume. Somehow this doesn't falsify the idea that the price is driven by tether-printing because it seems there's no possible turn of events that can falsify that belief - it doesn't matter whether Bitcoin is going up or down, or whether the trading driving the price involves tether, it's always tether.
- gaius 9y ago
  The question is, say I had a million dollars worth of bitcoin. Or 10 million, or 100 million. How easily could I exchange them for a traditional hard currency, GBP, CHF, USD? What is the depth of the liquidity of this market? Without that, the valuation is meaningless.
  - kss238 9y ago
    The 24hr volume for bitcoin is currently at 6.2 B. Selling 10 MM of bitcoin in a day would not affect price very much. Looking at the largest American exchange (6% of daily btc volume), GDAX, a 10 MM market sell order would drop the price to around 9400 USD from 9750 USD currently. Selling 100 MM of bitcoin in a day would affect the price significantly. Looking at GDAX, a 100 MM market sell order would drop the price to around 7000 USD from 9750 USD currently. Although this would be arbed pretty quickly and I would think that it would recover to maybe 8500 USD.
    - empath75 9y ago
      Volume in tethers or dollars?
mettamage 9y ago
I'm a bit weary. Say this cryptocurrency thing does take of and it's not a bubble. Then wouldn't this have similar effects that quantitative easing would have? I understand quantitative easing as 'printing money', because I'm not an economics person. But if this would take off and get a strong foothold at the prices that we're seeing now (bitcoin almost 10K in dollars), then didn't some subset of techies print a lot more money than there is? To me it seems there might be a chance that we're devaluing real currencies by quite a bit over the course of the next couple of years. Of course, the bigger chance is that this is a bubble and it will pop, but what if it isn't? I know this is quite an unnuanced comment. I'm putting it out here, because I feel other people have the same concern and would like to see people who know a bit more comment on these ideas.
- Sir_Substance 9y ago
  >then didn't some subset of techies print a lot more money than there is? I think it's quite important that you watch this: https://www.youtube.com/watch?v=4AC6RSau7r8 https://www.youtube.com/watch?v=4AC6RSau7r8 If you feel extremely angry afterwards, you're not alone.
- sp4ke 9y ago
  > But if this would take off and get a strong foothold at the prices that we're seeing now (bitcoin almost 10K in dollars), then didn't some subset of techies print a lot more money than there is? Over the course of history, people crated money out of many physical objects that had the "money" properties. Money is a tool to represent value of exchange. As long as we all agree on it's value. In the fiat world, the value of money is artificially fixed by the central banks and backed by the military power of its governments. it has effectively an unlimited supply. Quantitative easing is one of the techniques used to quickly increase the supply as it fits the central banks. You, me and all fiat money users have no say in it. Bitcoin, is a limited amount of money supply that will ever exist. It is backed by math and cryptography and an open source ecosystem. It was decided so by us the people and not central banks. We didn't ask for their permission the same way as they don't ask for ours when they decide to print more. Many of us believers in Bitcoin do not agree with the way central banks handle the most important tool of our civilization (Money) and do not agree with the current mainstream economic theory. So we decided to exit that system and try our own. > To me it seems there might be a chance that we're devaluing real currencies by quite a bit over the course of the next couple of years. Of course, the bigger chance is that this is a bubble and it will pop, but what if it isn't? If fiat currencies get devalued, and they will if the Bitcoin experiment works, then it would just mean fiat money is a weaker money than bitcoin (see Gresham Law[1]). In that case, is it the fault of the inventors if they invented a better system ? As of the "speculative" nature of bitcoin, yes it is. What drives speculation is greed. Bitcoin at the protocol level is just a communication system. If you couple greed and Metacalfe's Law[2], you obtain a very powerful incentive for the system to grow. I think of this incentive as a the trojan horse to the current financial system. People will come through greed and stay once they discover and learn about this new system, since it's not likely the central banks will "objectively" assess the value of Bitcoin. The biggest part of humanity does not benefit from our current central bank system, so it has to get disrupted and replaced with a better one. Either this, or we're stuck with the current unhuman, exploiting system. As an optimist, I'm betting on the former. [1] https://en.wikipedia.org/wiki/Gresham's_law https://en.wikipedia.org/wiki/Gresham's_law [2] https://en.wikipedia.org/wiki/Metcalfe%27s_law https://en.wikipedia.org/wiki/Metcalfe%27s_law
moonbug22 9y ago
Not a currency. Doesn't have a 'market cap'.
- mfrommil 9y ago
  Currency "refers to money in any form when in actual use or circulation as a medium of exchange". Definitely is money in a relatively new form, that millions of people are using to facilitate exchanges. Why wouldn't BTC be considered currency?
deleted 9y ago
[deleted]
neinnein 9y ago
The comments on Bitcoin in here are almost all made by people who don't understand what they're talking about, spewing lies and half truths. Zero understanding, zero facts, 100% angry. It's hilarious.
- Merthurian 9y ago
  Couldn't agree more XD so funny.
down 9y ago
gold has $7 Trillion and I fail to see how gold is a better store of value, I fail to see why would anyone buy gold bullion for example, is just a piece of metal.
- roenxi 9y ago
  Well, gold owes it's continued existence to the continued holding of the laws of physics. Practically, I suspect Bitcoin relies on the reach bitcoin mining networks. If, eg, China's bureaucrats go mad and split China off from the main internet for a decade, what happens to bitcoin? I've been led to believe the serious mining pools are Chinese. Gold doesn't care about that sort of thing at all, it just keeps existing. There are arguments for both. Storing metal is a cost.
  - colejohnson66 9y ago
    If China cuts off its internet, Bitcoin would still exist though. I fail to see the connection
    - gonvaled 9y ago
      It would still exist, but split into two blockchains. They would diverge, effectively becoming two completely different things, with different values. What kind of asset you have would depend on what network you are connected to. This situation already exists for gold: gold (the physical stuff) in China and in the EU are loosely coupled: try to move your gold bar around.
- foepys 9y ago
  > I fail to see why would anyone buy gold bullion for example To make electronics out of it. The comparison of Bitcoin with gold falls short because gold is useful even outside of being a commodity or payment method.
- twelve40 9y ago
  imho the biggest difference is: gold is currently the preferred reserve by the world governments, which hold 30k tons, including the government with the largest military in the world. There is a chance that those in power will put a bit of effort to keep it more or less stable.
noway421 9y ago
Who provides liquidity for bitcoin still? With all that growth, everyone would only want to hold.
- icebraining 9y ago
  People who understand that past performance is no guarantee of future results? If you entered and made a good return, you might want to save it in something considered safer. Also, you might want to use the money for something else.
roel_v 9y ago
I couldn't tell from the article - how do they define 'market cap'? Nr of currently mined coins * current value? Because if so, how does that make sense - nobody knows how many coins are 'lost'. Is there anyone watching e.g. how many coins haven't moved wallet since, say, 2013? Like, satoshi's coins - does it make sense to include those in any metric? (maybe they're using an entirely different definition in which case the above is moot)
- arez 9y ago
  Yes, number of coins in circulation * price is how the cryptoscene defines it. There're studies that calculate the amount of lost coins around 4million
- eknkc 9y ago
  I believe it is calculated based on the amount of coins in circulation. Maybe those that had a movement in last N days or something like that, not sure about the exact details. Daily transaction volume might be a better indication though..
  - gonvaled 9y ago
    You are looking for "Bitcoins days destroyed" [1] [1] https://bitcoin.stackexchange.com/q/845/9479 https://bitcoin.stackexchange.com/q/845/9479
Von_Jones 9y ago
I've bought a bunch of bitcoins: it's a fantastic investment in the vast and indubitable stupidity of humans. People don't sell, they only "hlod" (it's no coincidence that the rallying cry for the numbnut bitcoiners is a typo), and the market is incredibly thin, driven up by people's willingness to buy smaller and smaller slices of the wretched things. Downside will always be limited, as sell-offs can always be stanched by whales holding up prices and people's training to hlod and hlod and hlod. It's such a headfvck, and all these bog-country paddies telling me in the wide suits on youtube about the future of internet currencies, convinces me that spivs and idiots will chase the value of bitcoin up for a long time to come. Bleeuuuurrrgggghhhhhh.

31 points by golangnews 9y ago

zokeia 9y ago

I honestly do not understand how this market cap comparison argument is useful in assessing the viability of Bitcoin.

gonvaled 9y ago
As a value store? Clearly because of exposure. As a vehicle for trade? Not there yet, we need more adoption, aided by exposure.
- joosters 9y ago
  Isn't the exposure making people less likely to trade? No-one wants to spend bitcoins because they're afraid they'll grow in value and they will have wasted money.
  - gonvaled 9y ago
    But people are trading all the time. The exchanges prove that: as many bitcoins bought as sold! :) Will the buyers be willing to use those bitcoins to buy other things than fiat currencies? Once more products are sold in btc, why not?
- osrec 9y ago
  Funnily enough, my grandparents were telling me about how they were suspicious of debit/credit cards when they first started. Now of course, they feel very comfortable using them. Not directly comparable with bitcoin, but interesting in the sense that it was a significant paradigm shift in the way money was spent - initially met with skepticism, but eventually it caught on.

docdeek 9y ago

One key difference right now, though, is that I can use my Mastercard to pay for just about anythying just about anywhere I happen to be. In comparison to this worldwide acceptance as a means of payment, BTC seems just about worthless.

iagooar 9y ago
BTC is the gold of cryptocurrency. Bitcoin's strength is not being a practical payment system. Instead, with Bitcoin, you can trade with any other currency.
gonvaled 9y ago
Perfectly right. This will only change if several factors converge to create the right conditions. One big factor would be a new "Google" of bitcoin, namely a disruptive new entry in the payements space, marketing BTC for the end user and threatening the incumbents to the point of forcing them to drop barriers to entry, and even start adopting the new technology.
mfrommil 9y ago
True, however BTC isn't that different from a credit card in terms of liquidity. Plastic is accepted at more merchants, BTC can be digitally cashed in anytime with only a short delay.
mmjaa 9y ago
I've got two credit cards, a Visa and a MasterCard, both of them backed by my Bitcoin wallet. Where's the problem? I can pay with Bitcoin anywhere I could've paid with Visa/Mastercard .. this isn't about BtC vs. Visa/Mastercard. Its about BtC vs. US$, &etc.
- qplex 9y ago
  What you are saying is that "I can pay with currency $x anywhere, I just need to exchange it first" If you use Visa/MasterCard, you will not pay _in_ BTC but in dollars/euros/whatever.

empath75 9y ago

The price of bitcoin is totally fraudulent, driven by a couple of exchanges literally printing money, and gullible people doing arbitrage and exchanging bitcoin for tether.

makomk 9y ago
The current price increase was driven almost entirely by a major US-based exchange which doesn't accept tether and has fairly substantial volume. Somehow this doesn't falsify the idea that the price is driven by tether-printing because it seems there's no possible turn of events that can falsify that belief - it doesn't matter whether Bitcoin is going up or down, or whether the trading driving the price involves tether, it's always tether.
gaius 9y ago
The question is, say I had a million dollars worth of bitcoin. Or 10 million, or 100 million. How easily could I exchange them for a traditional hard currency, GBP, CHF, USD? What is the depth of the liquidity of this market? Without that, the valuation is meaningless.
- kss238 9y ago
  The 24hr volume for bitcoin is currently at 6.2 B. Selling 10 MM of bitcoin in a day would not affect price very much. Looking at the largest American exchange (6% of daily btc volume), GDAX, a 10 MM market sell order would drop the price to around 9400 USD from 9750 USD currently. Selling 100 MM of bitcoin in a day would affect the price significantly. Looking at GDAX, a 100 MM market sell order would drop the price to around 7000 USD from 9750 USD currently. Although this would be arbed pretty quickly and I would think that it would recover to maybe 8500 USD.
  - empath75 9y ago
    Volume in tethers or dollars?

mettamage 9y ago

I'm a bit weary. Say this cryptocurrency thing does take of and it's not a bubble. Then wouldn't this have similar effects that quantitative easing would have? I understand quantitative easing as 'printing money', because I'm not an economics person. But if this would take off and get a strong foothold at the prices that we're seeing now (bitcoin almost 10K in dollars), then didn't some subset of techies print a lot more money than there is? To me it seems there might be a chance that we're devaluing real currencies by quite a bit over the course of the next couple of years. Of course, the bigger chance is that this is a bubble and it will pop, but what if it isn't? I know this is quite an unnuanced comment. I'm putting it out here, because I feel other people have the same concern and would like to see people who know a bit more comment on these ideas.

Sir_Substance 9y ago
>then didn't some subset of techies print a lot more money than there is? I think it's quite important that you watch this: https://www.youtube.com/watch?v=4AC6RSau7r8 https://www.youtube.com/watch?v=4AC6RSau7r8 If you feel extremely angry afterwards, you're not alone.
sp4ke 9y ago
> But if this would take off and get a strong foothold at the prices that we're seeing now (bitcoin almost 10K in dollars), then didn't some subset of techies print a lot more money than there is? Over the course of history, people crated money out of many physical objects that had the "money" properties. Money is a tool to represent value of exchange. As long as we all agree on it's value. In the fiat world, the value of money is artificially fixed by the central banks and backed by the military power of its governments. it has effectively an unlimited supply. Quantitative easing is one of the techniques used to quickly increase the supply as it fits the central banks. You, me and all fiat money users have no say in it. Bitcoin, is a limited amount of money supply that will ever exist. It is backed by math and cryptography and an open source ecosystem. It was decided so by us the people and not central banks. We didn't ask for their permission the same way as they don't ask for ours when they decide to print more. Many of us believers in Bitcoin do not agree with the way central banks handle the most important tool of our civilization (Money) and do not agree with the current mainstream economic theory. So we decided to exit that system and try our own. > To me it seems there might be a chance that we're devaluing real currencies by quite a bit over the course of the next couple of years. Of course, the bigger chance is that this is a bubble and it will pop, but what if it isn't? If fiat currencies get devalued, and they will if the Bitcoin experiment works, then it would just mean fiat money is a weaker money than bitcoin (see Gresham Law[1]). In that case, is it the fault of the inventors if they invented a better system ? As of the "speculative" nature of bitcoin, yes it is. What drives speculation is greed. Bitcoin at the protocol level is just a communication system. If you couple greed and Metacalfe's Law[2], you obtain a very powerful incentive for the system to grow. I think of this incentive as a the trojan horse to the current financial system. People will come through greed and stay once they discover and learn about this new system, since it's not likely the central banks will "objectively" assess the value of Bitcoin. The biggest part of humanity does not benefit from our current central bank system, so it has to get disrupted and replaced with a better one. Either this, or we're stuck with the current unhuman, exploiting system. As an optimist, I'm betting on the former. [1] https://en.wikipedia.org/wiki/Gresham's_law https://en.wikipedia.org/wiki/Gresham's_law [2] https://en.wikipedia.org/wiki/Metcalfe%27s_law https://en.wikipedia.org/wiki/Metcalfe%27s_law

moonbug22 9y ago

Not a currency. Doesn't have a 'market cap'.

mfrommil 9y ago
Currency "refers to money in any form when in actual use or circulation as a medium of exchange". Definitely is money in a relatively new form, that millions of people are using to facilitate exchanges. Why wouldn't BTC be considered currency?

deleted 9y ago

[deleted]

neinnein 9y ago

The comments on Bitcoin in here are almost all made by people who don't understand what they're talking about, spewing lies and half truths. Zero understanding, zero facts, 100% angry. It's hilarious.

Merthurian 9y ago
Couldn't agree more XD so funny.

down 9y ago

gold has $7 Trillion and I fail to see how gold is a better store of value, I fail to see why would anyone buy gold bullion for example, is just a piece of metal.

roenxi 9y ago
Well, gold owes it's continued existence to the continued holding of the laws of physics. Practically, I suspect Bitcoin relies on the reach bitcoin mining networks. If, eg, China's bureaucrats go mad and split China off from the main internet for a decade, what happens to bitcoin? I've been led to believe the serious mining pools are Chinese. Gold doesn't care about that sort of thing at all, it just keeps existing. There are arguments for both. Storing metal is a cost.
- colejohnson66 9y ago
  If China cuts off its internet, Bitcoin would still exist though. I fail to see the connection
  - gonvaled 9y ago
    It would still exist, but split into two blockchains. They would diverge, effectively becoming two completely different things, with different values. What kind of asset you have would depend on what network you are connected to. This situation already exists for gold: gold (the physical stuff) in China and in the EU are loosely coupled: try to move your gold bar around.
foepys 9y ago
> I fail to see why would anyone buy gold bullion for example To make electronics out of it. The comparison of Bitcoin with gold falls short because gold is useful even outside of being a commodity or payment method.
twelve40 9y ago
imho the biggest difference is: gold is currently the preferred reserve by the world governments, which hold 30k tons, including the government with the largest military in the world. There is a chance that those in power will put a bit of effort to keep it more or less stable.

noway421 9y ago

Who provides liquidity for bitcoin still? With all that growth, everyone would only want to hold.

icebraining 9y ago
People who understand that past performance is no guarantee of future results? If you entered and made a good return, you might want to save it in something considered safer. Also, you might want to use the money for something else.

roel_v 9y ago

I couldn't tell from the article - how do they define 'market cap'? Nr of currently mined coins * current value? Because if so, how does that make sense - nobody knows how many coins are 'lost'. Is there anyone watching e.g. how many coins haven't moved wallet since, say, 2013? Like, satoshi's coins - does it make sense to include those in any metric? (maybe they're using an entirely different definition in which case the above is moot)

arez 9y ago
Yes, number of coins in circulation * price is how the cryptoscene defines it. There're studies that calculate the amount of lost coins around 4million
eknkc 9y ago
I believe it is calculated based on the amount of coins in circulation. Maybe those that had a movement in last N days or something like that, not sure about the exact details. Daily transaction volume might be a better indication though..
- gonvaled 9y ago
  You are looking for "Bitcoins days destroyed" [1] [1] https://bitcoin.stackexchange.com/q/845/9479 https://bitcoin.stackexchange.com/q/845/9479

Von_Jones 9y ago

I've bought a bunch of bitcoins: it's a fantastic investment in the vast and indubitable stupidity of humans. People don't sell, they only "hlod" (it's no coincidence that the rallying cry for the numbnut bitcoiners is a typo), and the market is incredibly thin, driven up by people's willingness to buy smaller and smaller slices of the wretched things. Downside will always be limited, as sell-offs can always be stanched by whales holding up prices and people's training to hlod and hlod and hlod. It's such a headfvck, and all these bog-country paddies telling me in the wide suits on youtube about the future of internet currencies, convinces me that spivs and idiots will chase the value of bitcoin up for a long time to come. Bleeuuuurrrgggghhhhhh.