3 ms·

>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

by 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.
  - comboy 9y ago
    I was just asked for an example. I'm in EU and I guarantee you that those less wealthy were hurt more during the whole crisis. They couldn't get money out of their accounts. Some couldn't buy food. There were accounts that got the haircut with money for their salaries and so on. The top 0.1% likely knew what was coming and got their money out in time. But the whole thing is not really all that relevant to the original point - that money in your bank account is controlled by the bank, not you. Many different people may decide that you should not have access to it after all. Currently you can have your account frozen because you had something to do with Bitcoin. Maybe next time the reason will be that you supported EFF. Sounds ridiculous, right? Well the present is ridiculous when you look at it from some years ago. And to be clear, there are many cases where the fact that it is the bank that controls that money is a good thing. Especially when the governments, central bank and banks excel at what they're doing.
    - krrrh 9y ago
      These are good points, and I think it's important to consider the worst case scenarios, because history does prove that the unexpected can happen in politics. I only challenged the point, because even a 30% haircut seems better to me than the inherent volatility, price manipulation by shady exchanges, difficulty and risk of storing safely, lack of recuse in case of theft and key loss seem like bigger threats for most people than those from banks and governments (especially in the west) when considering a long term store of value.

by mrep 9y ago

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.
- comboy 9y ago
  I was just asked for an example. I'm in EU and I guarantee you that those less wealthy were hurt more during the whole crisis. They couldn't get money out of their accounts. Some couldn't buy food. There were accounts that got the haircut with money for their salaries and so on. The top 0.1% likely knew what was coming and got their money out in time. But the whole thing is not really all that relevant to the original point - that money in your bank account is controlled by the bank, not you. Many different people may decide that you should not have access to it after all. Currently you can have your account frozen because you had something to do with Bitcoin. Maybe next time the reason will be that you supported EFF. Sounds ridiculous, right? Well the present is ridiculous when you look at it from some years ago. And to be clear, there are many cases where the fact that it is the bank that controls that money is a good thing. Especially when the governments, central bank and banks excel at what they're doing.
  - krrrh 9y ago
    These are good points, and I think it's important to consider the worst case scenarios, because history does prove that the unexpected can happen in politics. I only challenged the point, because even a 30% haircut seems better to me than the inherent volatility, price manipulation by shady exchanges, difficulty and risk of storing safely, lack of recuse in case of theft and key loss seem like bigger threats for most people than those from banks and governments (especially in the west) when considering a long term store of value.