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I've always been a negative detractor of bitcoin. But then I realized the problem was it was marketed wrong. As a currency, it's a nightmare of a creation. B

by swalsh 9y ago

I've always been a negative detractor of bitcoin. But then I realized the problem was it was marketed wrong. As a currency, it's a nightmare of a creation. But as a store of value, it's actually pretty good. As long as you don't buy in at one of the speculative bubbles (which admittedly is when the majority of people get in), it's been pretty good at more or less maintaining its value. As a non-physical thing, it's a good place to go when you're not sure about where to put your money. That used to be the role of the dollar, but this is a good alternative that has cheaper forex fees. I think the long-term value of bitcoin will not be buying groceries, but storing money while you wait for your the storm your grocery stores currency is in to subside. Probably not relevant to Americans right now, but I'm sure some people in Latin America can see the value.

ceejayoz 9y ago
> But as a store of value, it's actually pretty good. It's got a pretty short, volatile history to be deciding that.
- zzzzzzzza 9y ago
  also much more difficult for average person or even gigantic corporation to secure than a physical good e.g. gold. And coins change over time with forks n crap, gold just stays gold.
  - nicky0 9y ago
    It's very easy to secure. Just generate a private key offline and never tell it to anyone.
    - y4mi 9y ago
      Gold is very easy to secure. Just dig a hole and throw it in. Nobody will find it if you don't tell anyone about it. Seriously! A digital key is NOT easier to secure than a physical one. If anything, it's harder. Gold only becomes hard to store if we're talking about huge quantities
      - nicky0 9y ago
        Print the key on paper and put it in a safe. How is that not easy? Or etch the key on a piece of metal, seal it in plastic, and throw THAT in the ground, if your are that way inclined! I don't see the difficulty.
      - lunchables 9y ago
        You can do the exact same thing with bitcoin. Write the write the recovery key on a piece of paper and bury it in a box. The advantage of bitcoin is you can encrypt it and store it offline in as many locations as you want.
- mirimir 9y ago
  Over the past ~7 years, the price has increased by ~10^5. There have been some bubbles, for sure. But all that has paled over the past year. The price could crash, certainly. Still, if futures become available, it could spike a lot higher before it does.
  - wpietri 9y ago
    And this is exactly what makes it a terrible store of value. As Wikipedia says, "The point of any store of value is risk management due to a stable demand for the underlying asset." Stable demand is definitely not a characteristic of Bitcoin.
    - sprafa 9y ago
      one word: gold no reason it stores value outside of the fact that we all agree that it does, and we all accept it for curreny. Bitcoin is at that point. It's turning into digital gold. I agree with the original commenter. Looking at Bitcoin as a currency with terrible UX kept me from investing for the past years. Now it's going past inflection point - it's a store of value that will be acceptable everywhere soon.
      - wpietri 9y ago
        You'd do better to spend a minute Googling before saying something so definitive. The use of gold for jewelry and industrial applications outweighs the investment use of it: https://www.statista.com/statistics/274684/global-demand-for-gold-by-purpose-quarterly-figures/ https://www.statista.com/statistics/274684/global-demand-for... Gold has been valued from time immemorial for its unique aesthetic and practical properties entirely aside from its value as a currency. That's clearly distinct from, say, paper dollars, which indeed have value only because we agree that they do (and because they're backed by the robust efforts of a government, of course).
        monort 9y ago
        You are looking at the wrong metric, it seems like they count only transactions, not holdings. Only Fort Knox holds over 4000 of metric tons of gold.
knownothing 9y ago
> As long as you don't buy in at one of the speculative bubbles I'm not so sure about that. You could have bought BTC anytime before the past week or so and it would have appreciated significantly, regardless of whether you bought it in a peak or trough. It's just a question of magnitude. E.g. if you bought 1 BTC at the lowest or highest price in 2015 you would still have outrageous returns on it today. This is not to say it will continue being the case going forward but it's crazy to look back at.
- krrrh 9y ago
  Let’s see how everyone feels after the next correction. The headlines today seem to change every time I load google news. Up 10%, down 20%. There’s no way to know where it will go from here.
  - knownothing 9y ago
    Yes. But I already stated that in my response. We do not know the future and you shouldn't trust anyone who tells you differently. My point is that there have been skeptics and people saying it's a bubble or too volatile for nearly all of Bitcoin's history. But if you bought BTC and held it--at any high or low, for any significant amount of time--you made a lot of money (either realized or unrealized, that doesn't matter).
    - goodside 9y ago
      > But if you bought BTC and held it--at any high or low, for any significant amount of time--you made a lot of money (either realized or unrealized, that doesn't matter). This isn't entirely true. If you bought Bitcoin anywhere near the height of the late-2013 mania (which is of course a lot of people, since that's why the price was so high), you lost half your value within a month or two and then had to hold until 2017 before you started to break even. You lost 70% if you held for a year and a half and gave up. The market from June to November 2011 was even more disastrous, falling from $29 to almost $2 and not recovering until February 2013. These are obviously cherry-picked dates, and you'd clearly have made a profit eventually if you kept holding, but it's still very possible to hold Bitcoin for years and lose money.
makk 9y ago
Something that consumes an unbounded amount of electricity is hardly a "non-physical thing."
- Frogolocalypse 9y ago
  TIL electricity is a physical thing.
  - wizardforhire 9y ago
    So is data, so are files, so are ledgers. Every program physically resides somewhere... Just because it's infinitesimally small and it's interface obfuscated doesn't mean it isn't real. Cue Feynman quote "the world is real and it's made of atoms!"
    - Frogolocalypse 9y ago
      So does that mean a 1 weighs more than a 0? Big-endian bytes weigh less than little-endian ones? What about polarization? North heavier than south?
      - ncallaway 9y ago
        If I move a rock from my left to my right does the rock weight more? Just because a physical thing changes state doesn't mean it weights more.
        Frogolocalypse 9y ago
        > If I move a rock from my left to my right does the rock weight more? It does to your left and your right. If I have a piece of paper with a one on it, and another one with a zero on it, and I exchange them. Do they weigh differently? Its a bit surprising that I'm being downvoted on a tech forum for asserting that information doesn't have weight.
        9y ago
vasilipupkin 9y ago
Why can't people in Latin America just buy gold or dollars to store value ? I mean it's a circular argument. To say bitcoin is a store of value, there has to be an apriori reason why it has value. It can't be a store of value because it is. Right ?
- anonymous5133 9y ago
  It can get seized by the government. Any traditional assets or physical assets that is. Bitcoin and crypto is significantly harder to do that. You basically need to get the private key. IMO, this is the main reason that it is a a superior store of value compared to gold, dollars or traditional assets. If your government is corrupt then it is reasonable that the police will seize your gold. Not much of a store of value if it can just be taken away from you.
  - vasilipupkin 9y ago
    Understood, but that doesn't explain why it's a store of value meaning why can't bitcoin cost 5k vs 10k
    - hw 9y ago
      supply vs demand. More and more people are getting introduced to bitcoin, understanding it and buying into it. There's also a cap on the total number of bitcoins, so scarcity is another factor. Just like why gold is worth X instead of X/2
      - vasilipupkin 9y ago
        ok, but gold sometimes is worth X and sometimes X/2, if you actually plot the chart of gold. Gold is not exactly a great investment
      - geezerjay 9y ago
        > More and more people are getting introduced to bitcoin, understanding it and buying into it. That's pretty much the definition of a pump-and-dump scheme.
cwkoss 9y ago
I think you're right. I think a lot of people hear "Digital Currency" and think 'something like Apple Pay', when Bitcoin's competition is closer to ACH/wire transfers. It's not a tech that everyone needs to use, and most people will pay an expert to use it for them. But if successful, could be a valuable medium for receiving payments from low-trust entities. For example, if a stock exchange accepted Bitcoin for funding accounts, you could get your account up, funded and ready to trade in less than an hour. Most stock exchanges now take several days for funds to clear.
- amenghra 9y ago
  The reason things take days to clear is not because the underlying money moving rails are slow. If/when your stock exchange starts accepting bitcoins, they may still continue to take days to clear things.
  - cwkoss 9y ago
    For what reason do you think a stock exchange would want to add artificial delay to Bitcoin deposits? I could see holding a portion as 'pending' until many confirmations, or perhaps until the Bitcoin can be liquidated on the market, but both of those seem like they could still resolve an order of magnitude faster than the 'competition'.
    - amenghra 9y ago
      The very same reasons they have delays right now. Institutions are able to move money pretty quickly and cheaply between themselves. The reason you don’t get that as an end user is because of compliance, fraud, etc.
      - cwkoss 9y ago
        I'd argue that Bitcoin would eliminate the fraud aspect (users can not 'fake' deposits), but compliance could certainly remain as an issue.
deleted 9y ago
[deleted]
cordite 9y ago
I like the concept, but it’s rate of change and lengthy transaction period and confusing transaction fees make it inhospitable for goods and services that I’d use it for.
geezerjay 9y ago
> I've always been a negative detractor of bitcoin. But then I realized the problem was it was marketed wrong. As a currency, it's a nightmare of a creation. But as a store of value, it's actually pretty good. This claim is absurd. Bitcoin is patently bad as a store of value, and that's perhaps bitcoin's worse and and most ill-suited applications. Even ignoring the speculative pressures and value manioulation being conducted, just look at how much bitcoin's market value has been fluctuating. Even yesterday it suffered a 10% drop for no reason at all. Who in their right mind believes it's a good idea to store value in a highly volatile service subjected to such speculative pressures? Nowadays bitcoin sounds a whole lot like a pump-and-dump scheme, where shills come out of the woodwork praising bitcoin's magic and supernatural properties to fool unsuspecting fools to keep pumping money into the fraud.

by swalsh 9y ago

ceejayoz 9y ago

> But as a store of value, it's actually pretty good. It's got a pretty short, volatile history to be deciding that.

zzzzzzzza 9y ago
also much more difficult for average person or even gigantic corporation to secure than a physical good e.g. gold. And coins change over time with forks n crap, gold just stays gold.
- nicky0 9y ago
  It's very easy to secure. Just generate a private key offline and never tell it to anyone.
  - y4mi 9y ago
    Gold is very easy to secure. Just dig a hole and throw it in. Nobody will find it if you don't tell anyone about it. Seriously! A digital key is NOT easier to secure than a physical one. If anything, it's harder. Gold only becomes hard to store if we're talking about huge quantities
    - nicky0 9y ago
      Print the key on paper and put it in a safe. How is that not easy? Or etch the key on a piece of metal, seal it in plastic, and throw THAT in the ground, if your are that way inclined! I don't see the difficulty.
    - lunchables 9y ago
      You can do the exact same thing with bitcoin. Write the write the recovery key on a piece of paper and bury it in a box. The advantage of bitcoin is you can encrypt it and store it offline in as many locations as you want.
mirimir 9y ago
Over the past ~7 years, the price has increased by ~10^5. There have been some bubbles, for sure. But all that has paled over the past year. The price could crash, certainly. Still, if futures become available, it could spike a lot higher before it does.
- wpietri 9y ago
  And this is exactly what makes it a terrible store of value. As Wikipedia says, "The point of any store of value is risk management due to a stable demand for the underlying asset." Stable demand is definitely not a characteristic of Bitcoin.
  - sprafa 9y ago
    one word: gold no reason it stores value outside of the fact that we all agree that it does, and we all accept it for curreny. Bitcoin is at that point. It's turning into digital gold. I agree with the original commenter. Looking at Bitcoin as a currency with terrible UX kept me from investing for the past years. Now it's going past inflection point - it's a store of value that will be acceptable everywhere soon.
    - wpietri 9y ago
      You'd do better to spend a minute Googling before saying something so definitive. The use of gold for jewelry and industrial applications outweighs the investment use of it: https://www.statista.com/statistics/274684/global-demand-for-gold-by-purpose-quarterly-figures/ https://www.statista.com/statistics/274684/global-demand-for... Gold has been valued from time immemorial for its unique aesthetic and practical properties entirely aside from its value as a currency. That's clearly distinct from, say, paper dollars, which indeed have value only because we agree that they do (and because they're backed by the robust efforts of a government, of course).
      - monort 9y ago
        You are looking at the wrong metric, it seems like they count only transactions, not holdings. Only Fort Knox holds over 4000 of metric tons of gold.

knownothing 9y ago

> As long as you don't buy in at one of the speculative bubbles I'm not so sure about that. You could have bought BTC anytime before the past week or so and it would have appreciated significantly, regardless of whether you bought it in a peak or trough. It's just a question of magnitude. E.g. if you bought 1 BTC at the lowest or highest price in 2015 you would still have outrageous returns on it today. This is not to say it will continue being the case going forward but it's crazy to look back at.

krrrh 9y ago
Let’s see how everyone feels after the next correction. The headlines today seem to change every time I load google news. Up 10%, down 20%. There’s no way to know where it will go from here.
- knownothing 9y ago
  Yes. But I already stated that in my response. We do not know the future and you shouldn't trust anyone who tells you differently. My point is that there have been skeptics and people saying it's a bubble or too volatile for nearly all of Bitcoin's history. But if you bought BTC and held it--at any high or low, for any significant amount of time--you made a lot of money (either realized or unrealized, that doesn't matter).
  - goodside 9y ago
    > But if you bought BTC and held it--at any high or low, for any significant amount of time--you made a lot of money (either realized or unrealized, that doesn't matter). This isn't entirely true. If you bought Bitcoin anywhere near the height of the late-2013 mania (which is of course a lot of people, since that's why the price was so high), you lost half your value within a month or two and then had to hold until 2017 before you started to break even. You lost 70% if you held for a year and a half and gave up. The market from June to November 2011 was even more disastrous, falling from $29 to almost $2 and not recovering until February 2013. These are obviously cherry-picked dates, and you'd clearly have made a profit eventually if you kept holding, but it's still very possible to hold Bitcoin for years and lose money.

makk 9y ago

Something that consumes an unbounded amount of electricity is hardly a "non-physical thing."

Frogolocalypse 9y ago
TIL electricity is a physical thing.
- wizardforhire 9y ago
  So is data, so are files, so are ledgers. Every program physically resides somewhere... Just because it's infinitesimally small and it's interface obfuscated doesn't mean it isn't real. Cue Feynman quote "the world is real and it's made of atoms!"
  - Frogolocalypse 9y ago
    So does that mean a 1 weighs more than a 0? Big-endian bytes weigh less than little-endian ones? What about polarization? North heavier than south?
    - ncallaway 9y ago
      If I move a rock from my left to my right does the rock weight more? Just because a physical thing changes state doesn't mean it weights more.
      - Frogolocalypse 9y ago
        > If I move a rock from my left to my right does the rock weight more? It does to your left and your right. If I have a piece of paper with a one on it, and another one with a zero on it, and I exchange them. Do they weigh differently? Its a bit surprising that I'm being downvoted on a tech forum for asserting that information doesn't have weight.
        9y ago

vasilipupkin 9y ago

Why can't people in Latin America just buy gold or dollars to store value ? I mean it's a circular argument. To say bitcoin is a store of value, there has to be an apriori reason why it has value. It can't be a store of value because it is. Right ?

anonymous5133 9y ago
It can get seized by the government. Any traditional assets or physical assets that is. Bitcoin and crypto is significantly harder to do that. You basically need to get the private key. IMO, this is the main reason that it is a a superior store of value compared to gold, dollars or traditional assets. If your government is corrupt then it is reasonable that the police will seize your gold. Not much of a store of value if it can just be taken away from you.
- vasilipupkin 9y ago
  Understood, but that doesn't explain why it's a store of value meaning why can't bitcoin cost 5k vs 10k
  - hw 9y ago
    supply vs demand. More and more people are getting introduced to bitcoin, understanding it and buying into it. There's also a cap on the total number of bitcoins, so scarcity is another factor. Just like why gold is worth X instead of X/2
    - vasilipupkin 9y ago
      ok, but gold sometimes is worth X and sometimes X/2, if you actually plot the chart of gold. Gold is not exactly a great investment
    - geezerjay 9y ago
      > More and more people are getting introduced to bitcoin, understanding it and buying into it. That's pretty much the definition of a pump-and-dump scheme.

cwkoss 9y ago

I think you're right. I think a lot of people hear "Digital Currency" and think 'something like Apple Pay', when Bitcoin's competition is closer to ACH/wire transfers. It's not a tech that everyone needs to use, and most people will pay an expert to use it for them. But if successful, could be a valuable medium for receiving payments from low-trust entities. For example, if a stock exchange accepted Bitcoin for funding accounts, you could get your account up, funded and ready to trade in less than an hour. Most stock exchanges now take several days for funds to clear.

amenghra 9y ago
The reason things take days to clear is not because the underlying money moving rails are slow. If/when your stock exchange starts accepting bitcoins, they may still continue to take days to clear things.
- cwkoss 9y ago
  For what reason do you think a stock exchange would want to add artificial delay to Bitcoin deposits? I could see holding a portion as 'pending' until many confirmations, or perhaps until the Bitcoin can be liquidated on the market, but both of those seem like they could still resolve an order of magnitude faster than the 'competition'.
  - amenghra 9y ago
    The very same reasons they have delays right now. Institutions are able to move money pretty quickly and cheaply between themselves. The reason you don’t get that as an end user is because of compliance, fraud, etc.
    - cwkoss 9y ago
      I'd argue that Bitcoin would eliminate the fraud aspect (users can not 'fake' deposits), but compliance could certainly remain as an issue.

deleted 9y ago

[deleted]

cordite 9y ago

I like the concept, but it’s rate of change and lengthy transaction period and confusing transaction fees make it inhospitable for goods and services that I’d use it for.

geezerjay 9y ago

> I've always been a negative detractor of bitcoin. But then I realized the problem was it was marketed wrong. As a currency, it's a nightmare of a creation. But as a store of value, it's actually pretty good. This claim is absurd. Bitcoin is patently bad as a store of value, and that's perhaps bitcoin's worse and and most ill-suited applications. Even ignoring the speculative pressures and value manioulation being conducted, just look at how much bitcoin's market value has been fluctuating. Even yesterday it suffered a 10% drop for no reason at all. Who in their right mind believes it's a good idea to store value in a highly volatile service subjected to such speculative pressures? Nowadays bitcoin sounds a whole lot like a pump-and-dump scheme, where shills come out of the woodwork praising bitcoin's magic and supernatural properties to fool unsuspecting fools to keep pumping money into the fraud.