5 ms·

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. Fo

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.

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.