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This criticism is not meant to say that each BTC will become practically too expensive to buy; we all understand that there are granular subdivisions. It's mea

by stvswn 9y ago

This criticism is not meant to say that each BTC will become practically too expensive to buy; we all understand that there are granular subdivisions. It's meant to say that a fixed money supply means that as usage of a currency expands, demand for the currency will increase, and supply cannot match. If the value of BTC continues to rise, you'll never want to buy anything with it -- why not wait 10 minutes for the price to drop? In the same sense, you'd never want to sell anything for bitcoin. You'd need to update the price several times a day! It's not very useful as a currency. This is a fundamental flaw with BTC, because there's absolutely nothing anyone can do to fix it, it's hardcoded. If we're all being honest with ourselves, people are buying BTC now because they expect the price to go up -- not because they expect to use it as a currency in the future. I don't think we know it's a bubble. No one can really know that. I think we do know that it's being used only for speculation at the moment, which makes it a commodity, not a currency.

cwkoss 9y ago
Bitcoin is still useful for settlement. It's not so useful for pricing things.
- jnordwick 9y ago
  No its not. Of BTC is constantly in flux you would never want to write or buy bonds in it. You wouldn't know what you are getting paid back in. Strongly related, if you settle in btc the currency risk (that the fx rate would change) is too great.
ponco 9y ago
That's the fundamental thing people are missing I think. Menu costs are a thing.
Frogolocalypse 9y ago
> If the value of BTC continues to rise, you'll never want to buy anything with it -- why not wait 10 minutes for the price to drop? That seems to be latest meme for attacking bitcoin. You know what makes new want to spend my bitcoin? I have a bitcoin debit card, and i like beer. Not a beer in 10 minutes either. So i buy it. The only difference is that the money in my wallet isn't being debased while I'm not buying beer with it. So beer just keeps getting cheaper.
- cstrat 9y ago
  > not a beer in 10 minutes the transaction would likely take much longer than 10 minutes - unless you paid a transaction fee worth many times the cost of the beer :)
  - Frogolocalypse 9y ago
    Or i just use my bitcoin debit card?
    - cstrat 9y ago
      oh so it is off-chain then? haven't really seen a product like that. Must be the same as leaving your coins in an exchange and converting to fiat when you spend?
      - Frogolocalypse 9y ago
        > so it is off-chain then? Yup. > Must be the same as leaving your coins in an exchange and converting to fiat when you spend? Yep. I just transfer bitcoin there when I need it. These days though, I just put the cash I want for the next couple of weeks from a paycheck onto it. I actually have to move bitcoin off the exchange, because it has increased so greatly over the past few months. My beer money is increasing in value faster than I spend it.
      - pteredactyl 9y ago
        Exchanges like Coinbase or Gemini are a less liquid example of this.
  - pteredactyl 9y ago
    Not if it’s transacted over a secondary market or exchange. People don’t understand this. For example, if you transact BTC directly over the network, yea it’ll be expensive. Like 5-8%. But if I transact through an exchange, it’s more like .25-.5%. And it’s instantaneous. They’re a clearinghouse that batches transactions periodically. Seems there’s a lot of misunderstanding about money in general, including crypto. I for one am glad awareness is raising. As I truly believe money/finance/capital is an extreme, if not the greatest, form of control.
mrb 9y ago
«If the value of BTC continues to rise, you'll never want to buy anything with it» That's a fallacy that keeps being repeated by those who never thought this logic through. I spend bitcoins. I have been spending them for 7 years. Because the thing is no one knows for sure that Bitcoin will keep rising, or even maintain its value. Therefore spending bitcoins today is actually logically the less risky option. In fact I can show that your argument doesn't hold in another way: if you think the value will keep rising, you should be putting all your life savings into Bitcoin at this very moment... And I know you are not doing it, because you don't know if Bitcoin will keep rising.

by stvswn 9y ago

cwkoss 9y ago

Bitcoin is still useful for settlement. It's not so useful for pricing things.

jnordwick 9y ago
No its not. Of BTC is constantly in flux you would never want to write or buy bonds in it. You wouldn't know what you are getting paid back in. Strongly related, if you settle in btc the currency risk (that the fx rate would change) is too great.

ponco 9y ago

That's the fundamental thing people are missing I think. Menu costs are a thing.

Frogolocalypse 9y ago

> If the value of BTC continues to rise, you'll never want to buy anything with it -- why not wait 10 minutes for the price to drop? That seems to be latest meme for attacking bitcoin. You know what makes new want to spend my bitcoin? I have a bitcoin debit card, and i like beer. Not a beer in 10 minutes either. So i buy it. The only difference is that the money in my wallet isn't being debased while I'm not buying beer with it. So beer just keeps getting cheaper.

cstrat 9y ago
> not a beer in 10 minutes the transaction would likely take much longer than 10 minutes - unless you paid a transaction fee worth many times the cost of the beer :)
- Frogolocalypse 9y ago
  Or i just use my bitcoin debit card?
  - cstrat 9y ago
    oh so it is off-chain then? haven't really seen a product like that. Must be the same as leaving your coins in an exchange and converting to fiat when you spend?
    - Frogolocalypse 9y ago
      > so it is off-chain then? Yup. > Must be the same as leaving your coins in an exchange and converting to fiat when you spend? Yep. I just transfer bitcoin there when I need it. These days though, I just put the cash I want for the next couple of weeks from a paycheck onto it. I actually have to move bitcoin off the exchange, because it has increased so greatly over the past few months. My beer money is increasing in value faster than I spend it.
    - pteredactyl 9y ago
      Exchanges like Coinbase or Gemini are a less liquid example of this.
- pteredactyl 9y ago
  Not if it’s transacted over a secondary market or exchange. People don’t understand this. For example, if you transact BTC directly over the network, yea it’ll be expensive. Like 5-8%. But if I transact through an exchange, it’s more like .25-.5%. And it’s instantaneous. They’re a clearinghouse that batches transactions periodically. Seems there’s a lot of misunderstanding about money in general, including crypto. I for one am glad awareness is raising. As I truly believe money/finance/capital is an extreme, if not the greatest, form of control.

mrb 9y ago

«If the value of BTC continues to rise, you'll never want to buy anything with it» That's a fallacy that keeps being repeated by those who never thought this logic through. I spend bitcoins. I have been spending them for 7 years. Because the thing is no one knows for sure that Bitcoin will keep rising, or even maintain its value. Therefore spending bitcoins today is actually logically the less risky option. In fact I can show that your argument doesn't hold in another way: if you think the value will keep rising, you should be putting all your life savings into Bitcoin at this very moment... And I know you are not doing it, because you don't know if Bitcoin will keep rising.