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"When you remove fake volume, the real BTC volume is quite healthy given its mkt cap. Gold’s market cap is ~$7T with a spot volume of ~$37B implying a 0.53% dai

"When you remove fake volume, the real BTC volume is quite healthy given its mkt cap. Gold’s market cap is ~$7T with a spot volume of ~$37B implying a 0.53% daily turnover. Bitcoin’s $70B market cap would imply a 0.39% daily turnover, very much in-line with that of gold" So people are using it as a store of value, rather than a medium of exchange? This would count against it being used just to buy drugs etc wouldn't it?

WalterSear 8y ago
As I understand it, it's primarily used for money laundering after the fact, rather than sales.
- benj111 8y ago
  Money laundering would imply short term parking of assets before moving them on? Which would tend to inflate trading volume? I don't have any money to launder so I'm not an expert, but that's seems right?
  - WalterSear 8y ago
    It's doesn't have to be short term. Previous processes mostly were, by necessity.
    - benj111 8y ago
      I'm thinking that if it becomes long term, isn't it then a store of value? I might be arguing semantics but if you put dirty money in to a box, and 5 years later it spits out clean money. That's different to a box where you put dirty money, it immediately spits out clean money, but you leave it there for safe keeping. On the other hand, if you have regular movement of money through a system, it becomes easier to trace the start and end points. If moneys just sitting there, you cant follow it.
      - WalterSear 8y ago
        It's also different to a box you put dirty money in, that spits out clean money immediately, and is also a secure place to store money. It's just solving both the fundamental problems of handling blood money at the same time, ergo Lambos and HODL genius.
caprese 8y ago
Traditionally bitcoin has been held to a new higher impossible standard than other asset classes, when put on the same level of them it functions similarly. For example, when looked at as a currency it acts similarly. Where the small tiny faction of the asset (M0) is used as a medium of exchange where people buy consumer goods and services. With M1 M2 M3 and MB being illiquid parts of the supply used for investment into other assets or for stores of value. > So people are using it as a store of value, rather than a medium of exchange? Just like currencies and metal commodities, both, and in similar proportions.
- benj111 8y ago
  Bitcoin is traded less than gold. Gold isn't really used to buy consumer goods, and tends to be used as a store of value, thus the low trading volume. So it doesn't seem as if bitcoin is being used to buy things. I wasn't making any judgement on what Bitcoin is good or bad for. I'm just inferring from the data how it is actually being used.
  - caprese 8y ago
    Right I wasn't talking about just gold. Bitcoin is held to a higher standard than actual currencies with regard to how much or little of it is used for purchases, and it is held to a higher standard than precious metals like gold with regard to how much or little of it is not moved at all. The people educated in those asset classes commenting on bitcoin don't seem to notice, the people not-educated in those asset classes commenting on bitcoin aren't familiar with the economics and velocity of any asset class. That contributes to the state of the conversation today. To move this discussion a little further, M0 of any currency would be a similar fraction of a percent as the trading portions of any commodity like gold. With bitcoin, we also have to understand that trading volume on exchanges won't illuminate whether bitcoin is used for buying anything, as that likely would not be a transaction volume reported on exchange, but directly on chain itself and on secondary routing networks like Lightning.
- sushisushisushi 8y ago
  This isn't really saying that much. It's like saying an orange is similar to a planet because "they're both spheroids." It's true, but it doesn't really tell you much. In principle, Bitcoin can be used as a medium of exchange, and it can be reasonably liquid. In practice, Bitcoin is largely treated like an abstract, illiquid commodity.
buboard 8y ago
is it easy to buy drugs with bitcoin anymore? i would guess drug addicts are not that patient
burlesona 8y ago
I think that's right. It's anecdotal but everyone I know who owns some BTC owns a small amount and sees it as a sort of (a) hedge against major turmoil in fiat and (b) possibly long-term upside if more and better uses for the tech materialize. So it's digital gold, and maybe being digital means it has long-term upside.
kingo55 8y ago
Why buy drugs/illicit things on an open, immutable and transparent ledger? Best use cash and leave no trace.
- Hamuko 8y ago
  Because you don't want to go meet drug dealers in an alley.
- RandomBacon 8y ago
  Or best use Monero for any (ideally legal) purchases you don't want public.
- antidesitter 8y ago
  Out of curiosity, why is RandomBacon's sibling comment hidden and marked [dead]?
connoredel 8y ago
It's true that Bitcoin doesn't have a lot of transaction volume, but this isn't where you'd see that. "Spot volume" (trading volume) is taking place on centralized exchanges -- not on the blockchain.

WalterSear 8y ago

As I understand it, it's primarily used for money laundering after the fact, rather than sales.

benj111 8y ago
Money laundering would imply short term parking of assets before moving them on? Which would tend to inflate trading volume? I don't have any money to launder so I'm not an expert, but that's seems right?
- WalterSear 8y ago
  It's doesn't have to be short term. Previous processes mostly were, by necessity.
  - benj111 8y ago
    I'm thinking that if it becomes long term, isn't it then a store of value? I might be arguing semantics but if you put dirty money in to a box, and 5 years later it spits out clean money. That's different to a box where you put dirty money, it immediately spits out clean money, but you leave it there for safe keeping. On the other hand, if you have regular movement of money through a system, it becomes easier to trace the start and end points. If moneys just sitting there, you cant follow it.
    - WalterSear 8y ago
      It's also different to a box you put dirty money in, that spits out clean money immediately, and is also a secure place to store money. It's just solving both the fundamental problems of handling blood money at the same time, ergo Lambos and HODL genius.

caprese 8y ago

Traditionally bitcoin has been held to a new higher impossible standard than other asset classes, when put on the same level of them it functions similarly. For example, when looked at as a currency it acts similarly. Where the small tiny faction of the asset (M0) is used as a medium of exchange where people buy consumer goods and services. With M1 M2 M3 and MB being illiquid parts of the supply used for investment into other assets or for stores of value. > So people are using it as a store of value, rather than a medium of exchange? Just like currencies and metal commodities, both, and in similar proportions.

benj111 8y ago
Bitcoin is traded less than gold. Gold isn't really used to buy consumer goods, and tends to be used as a store of value, thus the low trading volume. So it doesn't seem as if bitcoin is being used to buy things. I wasn't making any judgement on what Bitcoin is good or bad for. I'm just inferring from the data how it is actually being used.
- caprese 8y ago
  Right I wasn't talking about just gold. Bitcoin is held to a higher standard than actual currencies with regard to how much or little of it is used for purchases, and it is held to a higher standard than precious metals like gold with regard to how much or little of it is not moved at all. The people educated in those asset classes commenting on bitcoin don't seem to notice, the people not-educated in those asset classes commenting on bitcoin aren't familiar with the economics and velocity of any asset class. That contributes to the state of the conversation today. To move this discussion a little further, M0 of any currency would be a similar fraction of a percent as the trading portions of any commodity like gold. With bitcoin, we also have to understand that trading volume on exchanges won't illuminate whether bitcoin is used for buying anything, as that likely would not be a transaction volume reported on exchange, but directly on chain itself and on secondary routing networks like Lightning.
sushisushisushi 8y ago
This isn't really saying that much. It's like saying an orange is similar to a planet because "they're both spheroids." It's true, but it doesn't really tell you much. In principle, Bitcoin can be used as a medium of exchange, and it can be reasonably liquid. In practice, Bitcoin is largely treated like an abstract, illiquid commodity.

buboard 8y ago

is it easy to buy drugs with bitcoin anymore? i would guess drug addicts are not that patient

burlesona 8y ago

I think that's right. It's anecdotal but everyone I know who owns some BTC owns a small amount and sees it as a sort of (a) hedge against major turmoil in fiat and (b) possibly long-term upside if more and better uses for the tech materialize. So it's digital gold, and maybe being digital means it has long-term upside.

kingo55 8y ago

Why buy drugs/illicit things on an open, immutable and transparent ledger? Best use cash and leave no trace.

Hamuko 8y ago
Because you don't want to go meet drug dealers in an alley.
RandomBacon 8y ago
Or best use Monero for any (ideally legal) purchases you don't want public.
antidesitter 8y ago
Out of curiosity, why is RandomBacon's sibling comment hidden and marked [dead]?

connoredel 8y ago

It's true that Bitcoin doesn't have a lot of transaction volume, but this isn't where you'd see that. "Spot volume" (trading volume) is taking place on centralized exchanges -- not on the blockchain.