18 ms·

It sounds weird, but I think a big part of Bitcoin's, and other crypto's value, isn't in the day to day ability to use it to buy and sell things, it's the inabi

by socrates1998 8y ago

It sounds weird, but I think a big part of Bitcoin's, and other crypto's value, isn't in the day to day ability to use it to buy and sell things, it's the inability of the government to devalue it. This isn't as big a problem in many richer countries with relatively stable currencies, but I sure as hell would prefer Bitcoin to anything the Venezuelan government or the Argentinian government would issue. The kinks are still getting worked out for Bitcoin, but I still think it is a big game changer.

grubles 8y ago
You hit the nail on the head. Hodling is, in some cases, the best use case for Bitcoin.
- pg_bot 8y ago
  There is a reason why an investor that holds a security until it is worthless is called a "bag holder". It makes no sense to "invest" in any currency when you can own productive assets instead. If you are concerned about the government seizing your assets, I would suggest emigrating to a country that respects private property rights. Countries that undergo hyperinflation are fairly rare, and the citizens of those countries tend to not tolerate it for very long. (Research dollarization of Ecuador and Zimbabwe)
  - dmichulke 8y ago
    Your argument is also applicable to gold yet it doesn't hold there
    - pg_bot 8y ago
      My argument holds for gold as well. Do some research on ROI for gold against the stock market for the past 80 years. You will find that it has a pitiful return when compared to owning stocks. Gold is a non productive asset, just because people buy it when there is a market panic doesn't make it a wise decision (people do dumb things during market panics). If you hoard gold you also run the risk of someone finding a lot of gold and ruining your investment. It's a commodity just like coal, copper, or wheat. If someone told you to hold all of your money in coal, the advice would be just as valid as those who tell you to put money in gold. At the end of the day if you have no productive use for the asset, why hold it?
      - dmichulke 8y ago
        > There is a reason why an investor that holds a security until it is worthless is called a "bag holder". It makes no sense to "invest" in any currency when you can own productive assets instead. The price of gold is nonzero for a good amount of years (2k+), so a lot of people buy/hold it and in that sense your theory is incorrect. Also productivity is not everything, sometimes "keeping what you have" is much more important. Finally, there are situations where you cannot - just emigrate to a country that respects your property rights (see migrant crisis) - buy US or other stocks > Do some research on ROI for gold against the stock market for the past 80 years. You will find that it has a pitiful return when compared to owning stocks Of course, do your research on X and you will find a time when X > stocks > Y. Hell, do it on bitcoin, it outperforms stocks during the last 10 years :-P > At the end of the day if you have no productive use for the asset, why hold it? Cheap/anonymous remittance and storing value without trusting a 3rd party are valuable, even if it's not productive. If you're really convinced about what you say, short gold and bitcoin. You'll get rich if you're correct and wiser if you're not.
    - beefield 8y ago
      Just wait for a day when there is a central banker that simultaneously has half a brain cell and tiniest set of balls. That day you see price of gold crashing in a way that has never seen before. Really, there is no more reason for a modern central bank to hold gold reserves than there is reason to hold ponzicoin reserves.
      - dmichulke 8y ago
        > Just wait for a day when there is a central banker that simultaneously has half a brain cell and tiniest set of balls. You do realize that you just implicitly said that you're basically much smarter and more courageous than every central banker in the world. I assume there are more than 10000, so that's not exactly humble. I'd bet against you but if you're short BTC or gold, we're already betting against each other anyway.
        beefield 8y ago
        I did not imply I would have those balls either.
bobthepanda 8y ago
I mean, what advantage does it have over gold? Advantages of gold vs. Bitcoin: - gold is pretty easy to find, not that hard to buy for the average consumer; BTC is anything but - gold is physical in form and securing it is not hard; BTC is not physical, exchanges get hacked with losses to accounts, in the event of a natural disaster or some event where power generation and internet is lost you lose access to BTC. (Someone can come break in and loot your gold, but people could also do that with your BTC wallet credentials, and if people are doing that you have worse things to worry about) - gold at least has some kind of floor value, since it does have uses other than a currency store; the same is not true for BTC
- guiomie 8y ago
  Can't figure out if this is sarcasm...
  - replies_to_all 8y ago
    Gold - Can be transferred instantly for pennies anywhere in the world with an internet connection. - Not controlled by an inflated "paper" gold market. - Can not be controlled by a government.... Yes, I hope it was sarcasm.
  - guiomie 8y ago
    I'm surprised about the downvotes, for me the following arugments can't be taken seriously? "gold is pretty easy to find, not that hard to buy for the average consumer; BTC is anything" ... You can buy BTC with your credit card no KYC needed or you can mine it yourself. Are you gonna start mining gold? If you want to buy to gold you need a trading account, or you order gold and it gets delivered to you, not as simple as buying BTC at all. "gold is physical in form and securing it is not hard" ... You need a safe and/or insurance, much more complicated then using a password/cold wallet. "gold at least has some kind of floor value" ... The floor value is really small if you remove the speculative aspect of gold.
- deevolution 8y ago
  Maybe its a generational thing, but i have no clue how i would go about buying/trading gold and i dont think anyone in my friend group does either. Bitcoin is far more accessible.
safgasCVS 8y ago
I'll add to this - As someone who's country is actively looking at expropriation of white-owned land a bank account that NO ONE can access without your permission is hugely appealing. If you're living in a country with functioning institutions you take this for granted
- msie 8y ago
  Which country is this?
  - dmichulke 8y ago
    South Africa I presume
    - safgasCVS 8y ago
      Yup
      - msie 8y ago
        Well, the issue is complex and not as clear cut as Trump or Fox News would say. For example, land seized during apartheid has to be returned. Of course this would mean some white farmers would have to give back some of their land.
        safgasCVS 8y ago
        That's not what's being tabled up for discussion - land forcefully taken during apartheid already has an existing process and that land is mostly urban. What's being discussed is forcible taking of white owned land 'just because' - there is no subtle point. That is the entire discussion.
- keymone 8y ago
  > If you're living in a country with functioning institutions you take this for granted people in developed world don't even realize how many things they take for granted.
sorokod 8y ago
It is weird, if you can't buy and sell with bitcoin daily(whatever that means) what value does it have for you?
- mathattack 8y ago
  Illiquid investments can still have value if they’re out of the reach of governments. (Governments can’t decide the exchange rate, or tax/confiscate them) This is a stretch in the US, but less so elsewhere. I’m not a holder because it’s too speculative an investment for me.
  - sorokod 8y ago
    So what happens when one actually does wants to liquidate?
    - mathattack 8y ago
      Go into another currency. (Yes it’s risky, but not compared to cash in Venezuela)
      - tedunangst 8y ago
        How does one liquidate an illiquid asset into another currency?
paulpauper 8y ago
I used to think that, but bitcoin didn't go up despite the currency collapse there. The problem is the vast majority of Venezuelans are too poor to buy even a fraction of a bitcoin. Hyperinflation destroys wealth very quickly, so often everyone it too poor by the time they can do anything. The wealthier people put their money overseas or in gold.
- justincormack 8y ago
  When I was there (20 years ago though), diamonds, gold nuggets and hundred dollar bills were fairly common forms of portable wealth. The banks and cash were never trusted (they were shut down when I was there), and the country mines gold.
fstanis 8y ago
> inability of the government to devalue it. This sounds like it seriously underestimates just how much influence a government can have. First and foremost, they can make it illegal. This would immediately make the fact it can't be devalued moot, as people who'd use it become criminals by default.
fandango 8y ago
The biggest part is plain and simple speculation. Betting on bitcoin and other crypto is like betting on human greed. Bitcoin could possibly be worth 1 million dollar, that is the main attractor. It is gambling, but in a fairly transparent and decentralized manner. I don't think it is fair to call it a ponzi (which it is not by definition because of the lack of a central actor) and also not a pyramid scheme (because it has genuine valid use cases). It is just a market of buyers and sellers, extremely volatile and in a very immature and experimental state.

grubles 8y ago

You hit the nail on the head. Hodling is, in some cases, the best use case for Bitcoin.

pg_bot 8y ago
There is a reason why an investor that holds a security until it is worthless is called a "bag holder". It makes no sense to "invest" in any currency when you can own productive assets instead. If you are concerned about the government seizing your assets, I would suggest emigrating to a country that respects private property rights. Countries that undergo hyperinflation are fairly rare, and the citizens of those countries tend to not tolerate it for very long. (Research dollarization of Ecuador and Zimbabwe)
- dmichulke 8y ago
  Your argument is also applicable to gold yet it doesn't hold there
  - pg_bot 8y ago
    My argument holds for gold as well. Do some research on ROI for gold against the stock market for the past 80 years. You will find that it has a pitiful return when compared to owning stocks. Gold is a non productive asset, just because people buy it when there is a market panic doesn't make it a wise decision (people do dumb things during market panics). If you hoard gold you also run the risk of someone finding a lot of gold and ruining your investment. It's a commodity just like coal, copper, or wheat. If someone told you to hold all of your money in coal, the advice would be just as valid as those who tell you to put money in gold. At the end of the day if you have no productive use for the asset, why hold it?
    - dmichulke 8y ago
      > There is a reason why an investor that holds a security until it is worthless is called a "bag holder". It makes no sense to "invest" in any currency when you can own productive assets instead. The price of gold is nonzero for a good amount of years (2k+), so a lot of people buy/hold it and in that sense your theory is incorrect. Also productivity is not everything, sometimes "keeping what you have" is much more important. Finally, there are situations where you cannot - just emigrate to a country that respects your property rights (see migrant crisis) - buy US or other stocks > Do some research on ROI for gold against the stock market for the past 80 years. You will find that it has a pitiful return when compared to owning stocks Of course, do your research on X and you will find a time when X > stocks > Y. Hell, do it on bitcoin, it outperforms stocks during the last 10 years :-P > At the end of the day if you have no productive use for the asset, why hold it? Cheap/anonymous remittance and storing value without trusting a 3rd party are valuable, even if it's not productive. If you're really convinced about what you say, short gold and bitcoin. You'll get rich if you're correct and wiser if you're not.
  - beefield 8y ago
    Just wait for a day when there is a central banker that simultaneously has half a brain cell and tiniest set of balls. That day you see price of gold crashing in a way that has never seen before. Really, there is no more reason for a modern central bank to hold gold reserves than there is reason to hold ponzicoin reserves.
    - dmichulke 8y ago
      > Just wait for a day when there is a central banker that simultaneously has half a brain cell and tiniest set of balls. You do realize that you just implicitly said that you're basically much smarter and more courageous than every central banker in the world. I assume there are more than 10000, so that's not exactly humble. I'd bet against you but if you're short BTC or gold, we're already betting against each other anyway.
      - beefield 8y ago
        I did not imply I would have those balls either.

bobthepanda 8y ago

I mean, what advantage does it have over gold? Advantages of gold vs. Bitcoin: - gold is pretty easy to find, not that hard to buy for the average consumer; BTC is anything but - gold is physical in form and securing it is not hard; BTC is not physical, exchanges get hacked with losses to accounts, in the event of a natural disaster or some event where power generation and internet is lost you lose access to BTC. (Someone can come break in and loot your gold, but people could also do that with your BTC wallet credentials, and if people are doing that you have worse things to worry about) - gold at least has some kind of floor value, since it does have uses other than a currency store; the same is not true for BTC

guiomie 8y ago
Can't figure out if this is sarcasm...
- replies_to_all 8y ago
  Gold - Can be transferred instantly for pennies anywhere in the world with an internet connection. - Not controlled by an inflated "paper" gold market. - Can not be controlled by a government.... Yes, I hope it was sarcasm.
- guiomie 8y ago
  I'm surprised about the downvotes, for me the following arugments can't be taken seriously? "gold is pretty easy to find, not that hard to buy for the average consumer; BTC is anything" ... You can buy BTC with your credit card no KYC needed or you can mine it yourself. Are you gonna start mining gold? If you want to buy to gold you need a trading account, or you order gold and it gets delivered to you, not as simple as buying BTC at all. "gold is physical in form and securing it is not hard" ... You need a safe and/or insurance, much more complicated then using a password/cold wallet. "gold at least has some kind of floor value" ... The floor value is really small if you remove the speculative aspect of gold.
deevolution 8y ago
Maybe its a generational thing, but i have no clue how i would go about buying/trading gold and i dont think anyone in my friend group does either. Bitcoin is far more accessible.

safgasCVS 8y ago

I'll add to this - As someone who's country is actively looking at expropriation of white-owned land a bank account that NO ONE can access without your permission is hugely appealing. If you're living in a country with functioning institutions you take this for granted

msie 8y ago
Which country is this?
- dmichulke 8y ago
  South Africa I presume
  - safgasCVS 8y ago
    Yup
    - msie 8y ago
      Well, the issue is complex and not as clear cut as Trump or Fox News would say. For example, land seized during apartheid has to be returned. Of course this would mean some white farmers would have to give back some of their land.
      - safgasCVS 8y ago
        That's not what's being tabled up for discussion - land forcefully taken during apartheid already has an existing process and that land is mostly urban. What's being discussed is forcible taking of white owned land 'just because' - there is no subtle point. That is the entire discussion.
keymone 8y ago
> If you're living in a country with functioning institutions you take this for granted people in developed world don't even realize how many things they take for granted.

sorokod 8y ago

It is weird, if you can't buy and sell with bitcoin daily(whatever that means) what value does it have for you?

mathattack 8y ago
Illiquid investments can still have value if they’re out of the reach of governments. (Governments can’t decide the exchange rate, or tax/confiscate them) This is a stretch in the US, but less so elsewhere. I’m not a holder because it’s too speculative an investment for me.
- sorokod 8y ago
  So what happens when one actually does wants to liquidate?
  - mathattack 8y ago
    Go into another currency. (Yes it’s risky, but not compared to cash in Venezuela)
    - tedunangst 8y ago
      How does one liquidate an illiquid asset into another currency?

paulpauper 8y ago

I used to think that, but bitcoin didn't go up despite the currency collapse there. The problem is the vast majority of Venezuelans are too poor to buy even a fraction of a bitcoin. Hyperinflation destroys wealth very quickly, so often everyone it too poor by the time they can do anything. The wealthier people put their money overseas or in gold.

justincormack 8y ago
When I was there (20 years ago though), diamonds, gold nuggets and hundred dollar bills were fairly common forms of portable wealth. The banks and cash were never trusted (they were shut down when I was there), and the country mines gold.

fstanis 8y ago

> inability of the government to devalue it. This sounds like it seriously underestimates just how much influence a government can have. First and foremost, they can make it illegal. This would immediately make the fact it can't be devalued moot, as people who'd use it become criminals by default.

fandango 8y ago

The biggest part is plain and simple speculation. Betting on bitcoin and other crypto is like betting on human greed. Bitcoin could possibly be worth 1 million dollar, that is the main attractor. It is gambling, but in a fairly transparent and decentralized manner. I don't think it is fair to call it a ponzi (which it is not by definition because of the lack of a central actor) and also not a pyramid scheme (because it has genuine valid use cases). It is just a market of buyers and sellers, extremely volatile and in a very immature and experimental state.