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I've been hearing this a lot, but what does it actually mean? Isn't the most important thing you want from a store of value stability? Ie, that it'll store the

I've been hearing this a lot, but what does it actually mean? Isn't the most important thing you want from a store of value stability? Ie, that it'll store the value that you put into it? Bitcoin certainly doesn't have that property. And if that's not the desired property implied by "store of value", what is?

pault 9y ago
I think most people are perfectly fine with the instability as long as the price doesn't go _down_.
- notheguyouthink 9y ago
  I'm not - I don't want to buy bitcoin at the moment because I keep waiting for a bit of a dip, I don't want to buy it at a record high. Likewise I don't want to use my bitcoin because it keeps massively "growing" in value. A stable currency is far more usable to me. Bitcoin is very similar to gold at the moment, in that I'm as likely to use it as I am to carry around bricks of gold in my pocket. For different reasons, sure, but the net result is the same.
  - chrisco255 9y ago
    We've been seeing record highs for the past 4-6 months though. The likelihood of any dip going below the past 6 month low is pretty low in my opinion. Especially with Lightning network, NASDAQ, other large players getting on board. This may be the last time we see $13K.
    - Fnoord 9y ago
      In your opinion, great. It may be last time we see $13k. Or it may not... So if something has been rising for 6 months, it cannot dip below that point, because of your opinion. Too bad we did not have your opinion in 1929 or 2008 or 2013 (Mt Gox). Would've saved us. How about businesses like Steam ditching Bitcoin support? How about Bitfinex not backing up their fake currency called tether?
      - notheguyouthink 9y ago
        And to be clear, I'm not even holding out for a massive dip. I just can't fathom buying it during a clear spike. I want to buy it going down, even if it just goes down from 16k to 10k or 12k, whatever. Normal fluctuations in Bitcoin, really - I just don't want to buy it on the upswing, on principle alone lol.
- mancerayder 9y ago
  Unless they're trading, in which case they're selling on perceived ups and downs, and in some cases making a killing - at least for now! The bullish trend with periodic pullbacks means profit for the bold / greedy.
  - pault 9y ago
    Right, but the Bitcoin evangelists have changed their rhetoric in the last few months, claiming that the current price is justified because Bitcoin is a good store of value, since it's obvious to everyone that the transaction infrastructure is a total dumpster fire at the moment and it's difficult to argue that it's so useful as a currency that $12,000/BTC is reasonable.
    - chrisco255 9y ago
      Bitcoin will fail to scale, until it doesn't any more. There is far too much economic incentive to scale BTC as a payments network for the assorted parties not to work it out eventually. Could one of the other cryptos overtake BTC? Only if they can overcome BTC's network effects. Right now, BTC has 9 years of history and a huge first mover advantage.
nlperguiy 9y ago
Main source of instability is price manipulation by big players and market inefficiency (not easy enough to arbitrage between exchanges). It would be interesting to see them do the same thing if BTC market cap is in couple of trillions. For example, if you're on any exchange that lists the total amount of orders in BTC, you can easily catch when the manipulation starts by seeing out of the ordinary sums (triple the amount of usual) for open positions. Not to mention insane bot activity that is equivalent to a DDOS attack on the exchange. During the last several hours of IOTA pump, exchanges, even the IOTA tangle were, and still are unstable.
- gruez 9y ago
  >not easy enough to arbitrage between exchanges doesn't tether fix this?
  - nlperguiy 9y ago
    for arbitrage you want to move all currencies, not just one. https://coinmarketcap.com/currencies/bitcoin/#markets https://coinmarketcap.com/currencies/bitcoin/#markets for example, bitcoin is now huge on bithumb, I'd buy it at bitstamp and sell it for 10% more, and repeat. given the slow transaction times, huge fees, large mempool, this is impossible to do. exchanges also ban you for trying to do arbitrage too, so there's a risk of losing all the funds.
    - celticninja 9y ago
      Exchanges don't ban users for exploiting arbitrage, every trade is money to the exchange and it benefits them to enable arbitrage to take place. No idea where you pulled that claim from. It's also not impossible to trade via bitstamp and bitthumb, sure it may take an hour or so to get your btc from bitstamp to bitthumb but that's not the bottleneck. Once you sell on bitthumb for USD you need to get that USD back to bitstamp. So you have to get it from a Korean Bank to your own account and then to bitstamps European bank account. Best case scenario that route takes 5-10 working days so the BTC network taking an hour or so to confirm is the least if your problems.
vasilipupkin 9y ago
The argument I hear by people like Ari Paul of Blocktower Capital, is that many emerging market currencies are already less stable, so you can use bitcoin as a way to escape inflation/government control in those markets.
djrogers 9y ago
The term gets used to contrast with 'medium of exchange', as the reality is that for most people, most of the time, bitcoin is not very liquid.
nicky0 9y ago
Store at least the value you put in. Falling in value would be bad. But rising in value is a bonus.
michaelscott 9y ago
Stores of value are normally viewed from a long term perspective. For most investors these are viewed as a hedge, even if the underlying store can be used for other purposes (think industrial and ornamental uses for silver, or the enjoyment of a renowned art piece), and so the short term fluctuation is not really an issue. That said, if the trend of wild volatility were to continue into the long term it would indeed prove to be a poor store of value, but market speculation would indicate as such long before we were to get there (assuming we pick now as the period delta starting point for a "long term").
eof 9y ago
Nothing has that value if you look at a long enough time span. Gold, a traditional store of value, gained >100% and then lost >50% in the course of a decade. Obviously this is not even noise compared to bitcoin; but my point is that bitcoin has shown to be an exceptional store of value for a long term hold. Beyond that, I think most people who believe in bitcoin as a long term store of value expect that when it reaches a mature global-level market cap; the swings should be less severe.

pault 9y ago

I think most people are perfectly fine with the instability as long as the price doesn't go _down_.

notheguyouthink 9y ago
I'm not - I don't want to buy bitcoin at the moment because I keep waiting for a bit of a dip, I don't want to buy it at a record high. Likewise I don't want to use my bitcoin because it keeps massively "growing" in value. A stable currency is far more usable to me. Bitcoin is very similar to gold at the moment, in that I'm as likely to use it as I am to carry around bricks of gold in my pocket. For different reasons, sure, but the net result is the same.
- chrisco255 9y ago
  We've been seeing record highs for the past 4-6 months though. The likelihood of any dip going below the past 6 month low is pretty low in my opinion. Especially with Lightning network, NASDAQ, other large players getting on board. This may be the last time we see $13K.
  - Fnoord 9y ago
    In your opinion, great. It may be last time we see $13k. Or it may not... So if something has been rising for 6 months, it cannot dip below that point, because of your opinion. Too bad we did not have your opinion in 1929 or 2008 or 2013 (Mt Gox). Would've saved us. How about businesses like Steam ditching Bitcoin support? How about Bitfinex not backing up their fake currency called tether?
    - notheguyouthink 9y ago
      And to be clear, I'm not even holding out for a massive dip. I just can't fathom buying it during a clear spike. I want to buy it going down, even if it just goes down from 16k to 10k or 12k, whatever. Normal fluctuations in Bitcoin, really - I just don't want to buy it on the upswing, on principle alone lol.
mancerayder 9y ago
Unless they're trading, in which case they're selling on perceived ups and downs, and in some cases making a killing - at least for now! The bullish trend with periodic pullbacks means profit for the bold / greedy.
- pault 9y ago
  Right, but the Bitcoin evangelists have changed their rhetoric in the last few months, claiming that the current price is justified because Bitcoin is a good store of value, since it's obvious to everyone that the transaction infrastructure is a total dumpster fire at the moment and it's difficult to argue that it's so useful as a currency that $12,000/BTC is reasonable.
  - chrisco255 9y ago
    Bitcoin will fail to scale, until it doesn't any more. There is far too much economic incentive to scale BTC as a payments network for the assorted parties not to work it out eventually. Could one of the other cryptos overtake BTC? Only if they can overcome BTC's network effects. Right now, BTC has 9 years of history and a huge first mover advantage.

nlperguiy 9y ago

Main source of instability is price manipulation by big players and market inefficiency (not easy enough to arbitrage between exchanges). It would be interesting to see them do the same thing if BTC market cap is in couple of trillions. For example, if you're on any exchange that lists the total amount of orders in BTC, you can easily catch when the manipulation starts by seeing out of the ordinary sums (triple the amount of usual) for open positions. Not to mention insane bot activity that is equivalent to a DDOS attack on the exchange. During the last several hours of IOTA pump, exchanges, even the IOTA tangle were, and still are unstable.

gruez 9y ago
>not easy enough to arbitrage between exchanges doesn't tether fix this?
- nlperguiy 9y ago
  for arbitrage you want to move all currencies, not just one. https://coinmarketcap.com/currencies/bitcoin/#markets https://coinmarketcap.com/currencies/bitcoin/#markets for example, bitcoin is now huge on bithumb, I'd buy it at bitstamp and sell it for 10% more, and repeat. given the slow transaction times, huge fees, large mempool, this is impossible to do. exchanges also ban you for trying to do arbitrage too, so there's a risk of losing all the funds.
  - celticninja 9y ago
    Exchanges don't ban users for exploiting arbitrage, every trade is money to the exchange and it benefits them to enable arbitrage to take place. No idea where you pulled that claim from. It's also not impossible to trade via bitstamp and bitthumb, sure it may take an hour or so to get your btc from bitstamp to bitthumb but that's not the bottleneck. Once you sell on bitthumb for USD you need to get that USD back to bitstamp. So you have to get it from a Korean Bank to your own account and then to bitstamps European bank account. Best case scenario that route takes 5-10 working days so the BTC network taking an hour or so to confirm is the least if your problems.

vasilipupkin 9y ago

The argument I hear by people like Ari Paul of Blocktower Capital, is that many emerging market currencies are already less stable, so you can use bitcoin as a way to escape inflation/government control in those markets.

djrogers 9y ago

The term gets used to contrast with 'medium of exchange', as the reality is that for most people, most of the time, bitcoin is not very liquid.

nicky0 9y ago

Store at least the value you put in. Falling in value would be bad. But rising in value is a bonus.

michaelscott 9y ago

Stores of value are normally viewed from a long term perspective. For most investors these are viewed as a hedge, even if the underlying store can be used for other purposes (think industrial and ornamental uses for silver, or the enjoyment of a renowned art piece), and so the short term fluctuation is not really an issue. That said, if the trend of wild volatility were to continue into the long term it would indeed prove to be a poor store of value, but market speculation would indicate as such long before we were to get there (assuming we pick now as the period delta starting point for a "long term").

eof 9y ago

Nothing has that value if you look at a long enough time span. Gold, a traditional store of value, gained >100% and then lost >50% in the course of a decade. Obviously this is not even noise compared to bitcoin; but my point is that bitcoin has shown to be an exceptional store of value for a long term hold. Beyond that, I think most people who believe in bitcoin as a long term store of value expect that when it reaches a mature global-level market cap; the swings should be less severe.