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> or a government that felt threatened by it to invest in >=51% hash power (or nationalize a few miners) and wreck it Well, AFAIU they will wreck their fork, f

> or a government that felt threatened by it to invest in >=51% hash power (or nationalize a few miners) and wreck it Well, AFAIU they will wreck their fork, fine by me. > Hyper-deflationary behavior is not a desirable characteristic for a currency. It is a desirable characteristic for a store of value though. And eventually, every hyper-deflation stops and it might become a currency.

api 9y ago
Bitcoin is a poor store of value too. It requires a lot of power simply to maintain it. It's a dissipative structure. Gold on the other hand can be buried in the ground and can just sit there for free. There are costs associated with moving and guarding or hiding it, but they're less than the cost of maintaining a vast network infrastructure and lot of energy-consuming hash computers. To me the whole "store of value" thing is goal post moving. It was originally intended to be a currency but it's not very good for that, so people have decided to punt on that goal and redefine its objectives. I also forgot to add that Bitcoin in its current incarnation is not quantum hard and will die when practical QC arrives. It could be rev'd to support post-quantum crypto, but the way it's dealt with scaling issues so far does not inspire confidence that it will get ahead of the curve.
- dmichulke 9y ago
  > To me the whole "store of value" thing is goal post moving. I agree and the bet is currently on LN to get that currency aspect back. But it troubles me and many others. On the mitigating side, many people think that it it's not a currency, even with low transaction fees, because it's so volatile. Therefore, those people have never bought it in the first place and cannot exert downward price pressure right now either.
lmm 9y ago
> eventually, every hyper-deflation stops and it might become a currency. That's not what tends to happen though. If you look at collectibles (which I maintain are the closest analogue for Bitcoin), they get rarer and the price climbs, and then people lose interest but the price doesn't drop; rather transactions become rarer and rarer, but those transactions that do happen still happen at the "old" price. And eventually no-one cares about the thing, but the value is still nominally high, and the market never gets more active.
- dmichulke 9y ago
  I don't think collectibles are the closest analogue for Bitcoin because Bitcoin is divisible and fungible. Therefore with collectibles a small set of people (the owners) may determine the price and it's always a binary choice. Hence the illiquidity.

api 9y ago

Bitcoin is a poor store of value too. It requires a lot of power simply to maintain it. It's a dissipative structure. Gold on the other hand can be buried in the ground and can just sit there for free. There are costs associated with moving and guarding or hiding it, but they're less than the cost of maintaining a vast network infrastructure and lot of energy-consuming hash computers. To me the whole "store of value" thing is goal post moving. It was originally intended to be a currency but it's not very good for that, so people have decided to punt on that goal and redefine its objectives. I also forgot to add that Bitcoin in its current incarnation is not quantum hard and will die when practical QC arrives. It could be rev'd to support post-quantum crypto, but the way it's dealt with scaling issues so far does not inspire confidence that it will get ahead of the curve.

dmichulke 9y ago
> To me the whole "store of value" thing is goal post moving. I agree and the bet is currently on LN to get that currency aspect back. But it troubles me and many others. On the mitigating side, many people think that it it's not a currency, even with low transaction fees, because it's so volatile. Therefore, those people have never bought it in the first place and cannot exert downward price pressure right now either.

lmm 9y ago

> eventually, every hyper-deflation stops and it might become a currency. That's not what tends to happen though. If you look at collectibles (which I maintain are the closest analogue for Bitcoin), they get rarer and the price climbs, and then people lose interest but the price doesn't drop; rather transactions become rarer and rarer, but those transactions that do happen still happen at the "old" price. And eventually no-one cares about the thing, but the value is still nominally high, and the market never gets more active.

dmichulke 9y ago
I don't think collectibles are the closest analogue for Bitcoin because Bitcoin is divisible and fungible. Therefore with collectibles a small set of people (the owners) may determine the price and it's always a binary choice. Hence the illiquidity.