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Ask yourself a question. Do you believe that at any point in future, we will have a reliable store of value in form of digital information? Banks don't provide

by comboy 9y ago

Ask yourself a question. Do you believe that at any point in future, we will have a reliable store of value in form of digital information? Banks don't provide that, it's somebody else saying that he will take care of your money an give you when you need it. We want some kind of gold but in a digital form. Information as a value in its most direct form. I believe we are going to have it. It would be a sad future without having such thing, now that we know it's possible. Second question. Is it going to be Bitcoin? Obviously it's possible and inevitable that there will be (or there is already) a cryptocurrency that's technically superior to Bitcoin in every aspect. So let's assume we switch to that, you move your "savings" from Bitcoin to X. But of course, at some point there will be something Pareto better than X. Is it going to be Y or Z? And is it already time to switch? Run that scenario in your head. It just doesn't work. You can't have a reliable store of value like that. Ever. That's why I think that if we are ever to have a reliable store of value in form of a cryptocurrency, it's going to be Bitcoin. It is however possible to switch to a completely new tech if you want to while not ruining the reliable store of value aspect, thanks to sidechains. But the magic of it is that Bitcoin keeps working as a store of value.

usrusr 9y ago
> It would be a sad future without having such thing Would it? An economy dominated by a deflatory currency would be very different from what we know and enjoy. Driven to the extreme it could even be a mass starvation level threat (well, that's easy to say given the low margin for error we have left).
- comboy 9y ago
  It's about a storage of value. To be able ta have a place to put what you have earned and not worry that the inflation is slowly eating it up. Apart from precious metals an example of asset of this type we already have would be real estate. And I don't think that in itself it's causing things like starvation. I'm not 100% certain though about the assumption I made at the beginning that you are questioning. I do believe it's better for society if we have it, but I don't think I've read enough history and economy books to be super confident about it. Money makes money and the gap between poorest and richest surely is getting wider. Even in inflationary economy. However I don't know any 10,11 figure VC who isn't worried about that and is not trying to do something to protect those at the bad end of the spectrum (yeah, I don't know many VCs this is just a quote from some Eric Weinstein interview).
mrep 9y ago
>Do you believe that at any point in future, we will have a reliable store of value in form of digital information? Banks don't provide that, it's somebody else saying that he will take care of your money an give you when you need it. 1. Banks don't provide that? Care to provide a source for banks taking or losing your money after the great depression? 2. The money in my checking account is in USD which is accepted everywhere I go and the price for things hardly ever changes. The bitcoin to USD price can fluctuate by up to 50% a day. How is that a "reliable store of value". 3. You don't want to sit on money but instead use it to make more money. Assets like gold are the worst way to do that: https://www.joshuakennon.com/stocks-vs-bonds-vs-gold-returns-for-the-past-200-years/ https://www.joshuakennon.com/stocks-vs-bonds-vs-gold-returns...
- comboy 9y ago
  1. Cyprus would be a pretty fresh example: https://www.theguardian.com/world/2013/mar/25/cyprus-bailout-deal-eu-closes-bank https://www.theguardian.com/world/2013/mar/25/cyprus-bailout... 2. I'm not saying this is where you should allocate value that you want to store safely and have access to it in the near future. It will continue to fluctuate wildly for quite some time. As a long term store of value though, it came a long way from where it was a few years ago. There's just no scenario where it disappears / goes to zero by now. And we're talking about store of value, it doesn't matter if they won't accept your gold coin when you go to buy some groceries. That doesn't change the fact that if I had to choose where to freeze some money for next 20 years I would definitely go with gold rather than USD. 3. Store of value != investing
  - krrrh 9y ago
    This Cyprus thing gets repeated by cryptobugs without considering the details: - Cyprus is a tiny country whose banks failed and needed a bailout, they had violated rules for staying in the Euro - It was used as a tax haven for Russians and a lot of the large deposits were not taxed and the loss to many of the largest depositors may have been a wash compared to paying their fair share. - The haircut was 30%, but didn’t apply to deposits under €100k. - Cyprus banks and depositors are less likely to suffer from moral hazard (cf recent American bank failures where large depositors were made 100% whole by the state) It was a really unique situation, and a 30% haircut sucks, but bitcoin is down 50% from its peak of 30 days ago. Unlike Cyprus where the middle class and poor were somewhat protected, the fall in value of bitcoin et al is probably affecting less wealthy retail investors disproportionately.

by comboy 9y ago

usrusr 9y ago

> It would be a sad future without having such thing Would it? An economy dominated by a deflatory currency would be very different from what we know and enjoy. Driven to the extreme it could even be a mass starvation level threat (well, that's easy to say given the low margin for error we have left).

comboy 9y ago
It's about a storage of value. To be able ta have a place to put what you have earned and not worry that the inflation is slowly eating it up. Apart from precious metals an example of asset of this type we already have would be real estate. And I don't think that in itself it's causing things like starvation. I'm not 100% certain though about the assumption I made at the beginning that you are questioning. I do believe it's better for society if we have it, but I don't think I've read enough history and economy books to be super confident about it. Money makes money and the gap between poorest and richest surely is getting wider. Even in inflationary economy. However I don't know any 10,11 figure VC who isn't worried about that and is not trying to do something to protect those at the bad end of the spectrum (yeah, I don't know many VCs this is just a quote from some Eric Weinstein interview).

mrep 9y ago

>Do you believe that at any point in future, we will have a reliable store of value in form of digital information? Banks don't provide that, it's somebody else saying that he will take care of your money an give you when you need it. 1. Banks don't provide that? Care to provide a source for banks taking or losing your money after the great depression? 2. The money in my checking account is in USD which is accepted everywhere I go and the price for things hardly ever changes. The bitcoin to USD price can fluctuate by up to 50% a day. How is that a "reliable store of value". 3. You don't want to sit on money but instead use it to make more money. Assets like gold are the worst way to do that: https://www.joshuakennon.com/stocks-vs-bonds-vs-gold-returns-for-the-past-200-years/ https://www.joshuakennon.com/stocks-vs-bonds-vs-gold-returns...

comboy 9y ago
1. Cyprus would be a pretty fresh example: https://www.theguardian.com/world/2013/mar/25/cyprus-bailout-deal-eu-closes-bank https://www.theguardian.com/world/2013/mar/25/cyprus-bailout... 2. I'm not saying this is where you should allocate value that you want to store safely and have access to it in the near future. It will continue to fluctuate wildly for quite some time. As a long term store of value though, it came a long way from where it was a few years ago. There's just no scenario where it disappears / goes to zero by now. And we're talking about store of value, it doesn't matter if they won't accept your gold coin when you go to buy some groceries. That doesn't change the fact that if I had to choose where to freeze some money for next 20 years I would definitely go with gold rather than USD. 3. Store of value != investing
- krrrh 9y ago
  This Cyprus thing gets repeated by cryptobugs without considering the details: - Cyprus is a tiny country whose banks failed and needed a bailout, they had violated rules for staying in the Euro - It was used as a tax haven for Russians and a lot of the large deposits were not taxed and the loss to many of the largest depositors may have been a wash compared to paying their fair share. - The haircut was 30%, but didn’t apply to deposits under €100k. - Cyprus banks and depositors are less likely to suffer from moral hazard (cf recent American bank failures where large depositors were made 100% whole by the state) It was a really unique situation, and a 30% haircut sucks, but bitcoin is down 50% from its peak of 30 days ago. Unlike Cyprus where the middle class and poor were somewhat protected, the fall in value of bitcoin et al is probably affecting less wealthy retail investors disproportionately.