6 ms·

Clearly my opinion is quite unpopular. I am fine with that. If you gave me $10,000 today and gave me the option to put that money anywhere: Stocks, Bonds, Savin

by craigc 9y ago

Clearly my opinion is quite unpopular. I am fine with that. If you gave me $10,000 today and gave me the option to put that money anywhere: Stocks, Bonds, Savings, Gold, Silver, etc. I would choose Bitcoin 10 times out of 10. Yes, Bitcoin has lost a lot of value since Christmas, but it is still up around 600% from last year. I am taking a long term view here. It is unfair to criticize Bitcoin’s decline because in terms of an asset class it is still miniscule. I consider it in the early price discovery days. Amazon stock declined from $107 to $7 around 2000-2001 so you could make the same argument that buying Amazon was a bad investment then, but you would look pretty dumb today. For reference, just last year, Bitcoin’s market cap was around $15 billion. That would be the equivalent of buying Amazon at around $32 based on the current price. The Bitcoin volatility will stabilize over time, and I think it will become a legitimate asset class. I would like to ask you in response to > There might have been people orchestrating surges and crashes, but that's pretty much the best case scenario for assets which people have no reason to value at all. Why would you say that fiat currencies have value (other than because the government says so)?

notahacker 9y ago
> Why would you say that fiat currencies have value (other than because the government says so)? This is a good question. Two reasons. Firstly there are many people who must obtain dollars in future to repay debts (all new dollars are created as someone's debt) or to pay taxes of around a quarter of GDP per annum. Secondly, central banks actively intervene to decrease supply when purchasing power drops faster than they desire. Since people need dollars, others will be able to purchase things they sell with dollars. Bitcoins on the other hand are created permanently, and BTC-denominated future repayment obligations are tiny in relation to supply. Since virtually nobody needs Bitcoin there is little reason other than optimism for value to remain above zero, never mind increase over time. AMZN was not the only stock to drop in 2000-1. Enron also dropped. Bitcoin does not have the properties of AMZN (a legal claim of a share of ownership of a business which has since become very successul indeed) but does have similar properties to those of Enron share certificates after the company was wound up (people have spent money acquiring them, their authenticity is verifiable and they cannot be duplicated, but they grant no claim on any tangible assets or income stream and thus are only worth what some Enron-certificate-enthusiast is willing to pay for them)

by craigc 9y ago

notahacker 9y ago

> Why would you say that fiat currencies have value (other than because the government says so)? This is a good question. Two reasons. Firstly there are many people who must obtain dollars in future to repay debts (all new dollars are created as someone's debt) or to pay taxes of around a quarter of GDP per annum. Secondly, central banks actively intervene to decrease supply when purchasing power drops faster than they desire. Since people need dollars, others will be able to purchase things they sell with dollars. Bitcoins on the other hand are created permanently, and BTC-denominated future repayment obligations are tiny in relation to supply. Since virtually nobody needs Bitcoin there is little reason other than optimism for value to remain above zero, never mind increase over time. AMZN was not the only stock to drop in 2000-1. Enron also dropped. Bitcoin does not have the properties of AMZN (a legal claim of a share of ownership of a business which has since become very successul indeed) but does have similar properties to those of Enron share certificates after the company was wound up (people have spent money acquiring them, their authenticity is verifiable and they cannot be duplicated, but they grant no claim on any tangible assets or income stream and thus are only worth what some Enron-certificate-enthusiast is willing to pay for them)