9 ms·

Bitcoin's Rally Masks Uncomfortable Fact: Almost Nobody Uses It

59 points by chadmeister 7y ago

vasilipupkin 7y ago
People trading something back and forth is a form of usage. they are using it. The author just doesn't like what they are using it for.
- PhasmaFelis 7y ago
  BitCoin was supposed to transform the way people buy things. Instead it's mainly transformed the way people buy BitCoin. That's a legitimate criticism.
- mindfulplay 7y ago
  Like Pokemon cards? It's fun. But does not carry any value. You can't buy a car or toilet paper with your precious Pokemon cards.
  - marliechiller 7y ago
    If you paid for the cards they inherently have value else they would be free... Despite what many people choose to ignore, bitcoin has value - at the very minimum for illicit transactions online - its just not an as widely accepted value. Whether that acceptance will increase remains to be seen but to write it off as worthless is disingenuous
    - vasilipupkin 7y ago
      forget pokemon cards. Magic the Gathering cards are pretty valuable and you can definitely sell them for a bunch of money and buy a car or whatever. Ok, they have a use case because people play the game. But why do they play the game? because they feel like it - there is no "inherent value" to those cards either. Tomorrow, the game goes out of style for whatever reason and the cards are worthless. But today, while people like to play the game, they are valuable. Today, people shop on Amazon. Tomorrow, something changes and they stop shopping on Amazon and Amazon stock falls a lot. There is obviously a difference, but it's not as fundamental as people think.
  - vasilipupkin 7y ago
    what's the value of gold? gold has some use case, but its market value far outstrips that use case. The use case of gold is exactly this - that people trade it back and forth in the form of futures, etfs and spot gold.
  - petraeus 7y ago
    You sure can if you find somebody willing to take them
village-idiot 7y ago
I’m not sure why anyone in their right minds thought bitcoin was going to be used by random civilians for their everyday transactions. Customers want the protections that banks and credit cards provide, and vendors don’t want to expose themselves to exchange rate risk when selling goods and services. Oh, and 4 transactions a second is far too low a limit for any currency.
- gwbas1c 7y ago
  For what it's worth, the Bitcoin paper points out that it's an experiment. Most people seem to gloss over and forget this critical point. (I've always been in shock at how many people don't realize that it's a poor currency, but a useful experiment overall.)
jraedisch 7y ago
There is a lot of work done in analyzing holding patterns. Would probably be interesting to see comparison to usage and price of gold as a store of value. For me, buying and holding seems to be legitimate usage. I guess that would count as "speculating". What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0?
- Nursie 7y ago
  > What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0? Do you expect to increase in price solely because there are a limited amount? There are many things which have that property, but are not good stores of value. Your ability to sell it later for more money is based on continuing demand. Unless there's some other use case, where is that demand going to come from? Isn't some of the value it is allegedly storing based on future expectations of utility?
  - ohaideredevs 7y ago
    This is beating a dead horse and the typical argument, but the same can be said for gold. Its "intrinsic value" in terms of practical application is far lower than the market cost given the plentiful substitutes for high current / low heat transmission applications. I really do wonder why Bloomberg hates Bitcoing. If you read through a history of their articles, they REALLY hate it.
    - Nursie 7y ago
      I haven't mentioned intrinsic value once in my post, I agree it's not especially useful to talk about. I'm asking why BTC value should keep going up without some sort of demand beyond people buying because they expect it to go up? Or do you think that's enough?
      - ohaideredevs 7y ago
        If you can answer that for gold & silver, then there is a point in talking about this. If not, the answer is "It's a secure, easily transferable, deflationary store of value. Examples of it being used - Venezuela. Gold is not an option due to crime. The local currency is not an option due to massive inflation.
onychomys 7y ago
Can we talk for a minute about that first graph in the article? "Bitcoin Activity By Category" supposedly lists percentages on the Y axis, but they included the percent sign on the label, making the range go from 0% to 1% instead of from 0 to 1 like they intended. Bloomberg should know better!
eof 7y ago
I'd just like to go on record saying I use it as a payment method for developer services for developers locked out of the western world's banking system. Of course most of these devs will take any of the top N cryptos. As a very early bitcoin adopter who made and lost and made and lost a fortune; I can say that bitcoin and crypto is still "ahead of schedule" for realistic-optimistic timelines of adoption. I still believe cryptocurrency will continue to grow and eventually eat gold; but I am less convinced that it will eat fiat.
sprash 7y ago
The instability and the high fees make it useless for generic payment. The lighting network was supposed to fix latter problem. As soon as the bitcoin price becomes stable it will be useful. As soon as it is useful it will swiftly rise in value and become unstable again. We have already seen several iterations of this cycle. Who knows when this will end.
- gwbas1c 7y ago
  Which brings up another important point: Typically, when someone wants someone to adopt their currency, they actively work to ensure that the currency has a stable value. Think of historical examples of governments buying and selling each others' gold and silver coins; or more recently governments actively buying and selling gold and silver in their currency; or even more recently governments holding reserves of other countries currency. The historical purpose is to ensure that a currency has a stable value, and is readily available for anyone who wants to use it. No one does this with Bitcoin. The incentives are to use the currency as a speculative bubble, instead of as a means of commerce. Drawing an analogy, in order for Bitcoin to work, there would need to be a "Bitcoin authority" that basically holds a huge reserve of Bitcoin or another commodity, and buys and sells to keep the value stable. Bitcoin goes up in value: Sell Bitcoin for some commodity, Bitcoin goes down in value, sell the commodity for Bitcoin. (Of course, a Bitcoin authority goes against the general anti-government promise of Bitcoin.)
deleted 7y ago
[deleted]
seibelj 7y ago
HN is full of bitter commenters who have been predicting the death of cryptocurrency for a decade, and it hasn’t come true. A community that learned of Bitcoin right as it was invented, dismissed it, and missed out on huge fortunes. Well, some people here thought for themselves and analyzed the technology and ideas on its merits. Just not the people who comment on these posts.
- rawrmaan 7y ago
  You analyzed Bitcoin on its technologies and merits and concluded that it’s a useful currency? Yikes.
  - bdcravens 7y ago
    I don’t think that was the crux of the comment. “.... missed out on huge fortunes” tells you where the focus is.
- malvosenior 7y ago
  I think Bitcoin pushes a lot of people's buttons because it was so new, exotic and difficult to understand that it really challenged a lot of people who consider themselves smart. I know I didn't "get it" right off the bat but I couldn't shake the feeling that the fact that I didn't understand it was a signal that something special was going on. So I kept pushing forwards. I read the whitepaper and thought, this seems cool but I still don't get it, something must be here. So I read more books (Mastering Bitcoin by O'Reilly is amazing). Finally I got it, understood the potential and realized just how amazing these concepts were. Unfortunately at that point the price had already risen to the point where I couldn't just buy hundreds of these things. I bought a few and now that looks like a freaking amazing investment. During this story arc, I also witnessed a growing dissent against Bitcoin. A lot of it came from the media and tech adjacent people but not technologists themselves. Initial complaints were more or less ad hominems (money for filthy nerds), as the currency went up in value, the story morphed conveniently to an ecological one as the rebuttal for that requires deeper knowledge of crypto and an acknowledgement of the energy consumption used to secure regular money. Now you get on HN and it's just hated. Passionate hate. I figure it's a mix of people that could have understood it and didn't until it was too late, people who still don't understand it, and people who don't like it due to the constant barrage of negative media coverage.
mhuffman 7y ago
This is literally being pumped up by algorithmic traders and no oversight. This rally is designed, as will the next downcycle and the next rally.
raesene9 7y ago
Even a quick look at CoinMarketCap shows you that there's something a little odd about the current rally. Look at the volume column and you'll see that Tether has more volume than bitcoin and has had for a little while. Tether has recently a) Admitted that they don't have 1:1 backing in USD b) They use customer funds for investment rather than just storing them and c) They're currently under investigation by the New York Attorney General. Against that backdrop they've increased the number of Tethers in circulation by $400 million in the last month... Now it's possible that they've got a load of companies who really believe in them to the point that they're eager to invest in Tether (even when there are other 1:1 backed stablecoins available) A different interpretation could be that Tether have worked out they can effectively just print money as much as they want and are using this to buy bitcoins, driving up the price...
- nathanasmith 7y ago
  >Even a quick look at CoinMarketCap shows you that there's something a little odd about the current rally. >Look at the volume column The really odd thing is getting your volume numbers from CoinMarketCap in the first place when according to this well argued deck[0], 95% of those numbers are fake. What you're looking at there is completely distorted as unregulated exchanges have a huge vested interest in inflating the numbers to dupe projects into paying higher listing fees and since most of the time, the fake volume doesn't track the waning and waxing of the real volume of legitimate exchanges, not only is that fake volume wrong quantitatively but it's also wrong relatively making it worthless and CMC practically worthless by extension though they do claim to be addressing the issue. [0]https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...
  - raesene9 7y ago
    It makes the point about relative volume, even if absolute levels are crap :) The volume point was around a stablecoin with issues having a higher relative volume than bitcoin itself.
cal5k 7y ago
I find it amusing that media doesn't give a crap about Bitcoin until there's price action. This was the exact same type of article that was dominating headlines back in the 2017 run-up. Bitcoin has proved remarkably resilient over the last 10 years. It's clear (to me, anyway) that this asset class/set of technologies is here to stay, it's really just a question of what comes of it. It's actually quite useful to be able to send large quantities of money anywhere in the world without needing a series of intermediaries. For that purpose alone I could see supply limitations leading to increased prices in the long haul. There are also some interesting "layer 2" projects that have been percolating for several years now with a lot of potential to make Bitcoin useful for smaller transactions. The insane hype of the last cycle understandably turned a lot of people off from crypto, but I think it would be a mistake to ignore the progress that's being made.
- LiquidSky 7y ago
  >Bitcoin has proved remarkably resilient over the last 10 years. What does that even mean? Resilient in what way? As this article notes, it hasn't been adopted for use in any meaningful or significant way. It's a speculation vehicle. I guess in the sense that it didn't literally disappear it's resilient, but beyond that the idea from its early days that it would fundamentally change the world and be widely adopted is gone. It's not the glorious dagger that will pierce the heart of the statist beast its libertarian boosters imagined. The governments, banks, and people of the world have mostly shrugged at it. Ironically, some banks and governments even started adopting the technology for their own uses. It's just a vehicle for speculation and a toy that doesn't seem to have any actually useful applications that couldn't have already been done better. >I think it would be a mistake to ignore the progress that's being made. What progress? It made some speculators rich but is otherwise useless.
  - cal5k 7y ago
    Resilient as in despite 10 years of continuous doomsday prognostications, Bitcoin continues to be traded and used around the world. And 1 BTC, this thing that didn't exist 10 years ago, is now worth $8,422.40 USD. As for utility: I've used it to pay contractors in Europe, for example, without having to figure out which money transmittal service is going to rip me off the least. Tons of expats living in North America and Europe use it to send money back to family in their home countries. People use it to hedge against runaway inflation caused by poor monetary policy. It could all fall apart in a few years, sure, but it's damn interesting. Being cynical just means if you're right you get to gloat about it, but if you're wrong you're missing something that could be really important.
berberous 7y ago
I think part of the reason for the dearth of merchant transactions is the lack of a tax safe harbor to treat it like currency, at least for transactions under a certain size. So long as buying a cup of coffee requires one to keep detailed records and report it as a capital gains, it is really not worth the trouble to use Bitcoin as a currency.
netwanderer3 7y ago
I have little doubt BTC price is being manipulated. Its price was kept very low for the longest time so some very powerful organizations such as Bakkt (backed by the same people behind NYSE) could accumulate most of its market supply. At the moment the price is being artificially pumped up to build momentum until enough people from the public buy into it, then its price will once again start dropping faster than gravity. You often can attribute the exact reasons why a stock price went up, but for BTC it seems to be a complete mystery black box that even the most well-versed traders couldn't tell you the exact reasons why it went up. For stock price for example, you just knew in advanced even from last year that Beyond Meat's stock was going to be a hit. "What The Health", an anti meat industry and pro vegans documentary film, was a HUGE success last year and you could see from miles away everything was set up for this trend to become mainstream in 2019 as public sentiments were beginning to swing very positively towards it. For BTC however, everything just seems like a wild guess as no one could pin point exactly what drives its price.
- jraedisch 7y ago
  Could you elaborate on how one would keep an asset artificially low?
  - sprash 7y ago
    You can't. What is more likely is that central banks that can print infinite amounts of their own money are buying up bitcoin in order to make it useless. Bitcoin is seen as competitor by central banks. The same happened to gold. As soon as one entity controlled the vast majority of gold the price ceased to be stable. Central banks already essentially destroyed gold as payment method. If central banks only sell 1% of their gold assets they increase the supply on the actual tradeable market so much that the price can be vastly manipulated. It would be smart if they do the same with bitcoin.
    - jraedisch 7y ago
      Why should all btc holders sell all their holdings, especially if price is steadily rising, since central banks are inflating money supply to buy more?
TrAnn3l 7y ago
I would like to see a comparison to the USD, and how much of the money flow is actually used for merchant transactions.
jraedisch 7y ago
The reason why I think Bitcoin's success (read increasing in wealth infinitely against fiat, albeit slowing down over time) is more probable than its demise is not that it is some kind of replacement religion for me. It is just that I have so far not heard any good arguments why it would not succeed. Of course opponents might say: why should it succeed if they see no reason for it to succeed. That position is completely acceptable to me, but the risk of losing out seems too high for me, so I invest a little bit, just to hedge. And because many people might do that, it could succeed. As long as there are no good arguments against holding a little bit. Which there aren't. Except maybe the ecological footprint. As soon as someone finds a solution to that without sacrificing the other qualities, a hardfork will surely succeed.
- nosuchthing 7y ago
  There's no point in a hard fork when you can just start fresh, and mint a new network of cryptocurrency. Especially due to the fact that the early cryptocoins like Bitcoin, Ethereum, and Monereo each designed their supplies to dump into a plutocratic distribution.
  - jraedisch 7y ago
    I think there is big value in continuity of store of value. People will be easier to convince if they do not lose stake when forking. One would not be buying BTC if one would fear that it can be replaced easily while destroying one's savings.
ykevinator 7y ago
Bitcoin is now a religion.
vpmpaul 7y ago
Media is clueless as usual. Are people spending gold bullion/coins? Nope. The government independent value store is the value of bitcoin.

59 points by chadmeister 7y ago

People trading something back and forth is a form of usage. they are using it. The author just doesn't like what they are using it for.

PhasmaFelis 7y ago
BitCoin was supposed to transform the way people buy things. Instead it's mainly transformed the way people buy BitCoin. That's a legitimate criticism.
mindfulplay 7y ago
Like Pokemon cards? It's fun. But does not carry any value. You can't buy a car or toilet paper with your precious Pokemon cards.
- marliechiller 7y ago
  If you paid for the cards they inherently have value else they would be free... Despite what many people choose to ignore, bitcoin has value - at the very minimum for illicit transactions online - its just not an as widely accepted value. Whether that acceptance will increase remains to be seen but to write it off as worthless is disingenuous
  - vasilipupkin 7y ago
    forget pokemon cards. Magic the Gathering cards are pretty valuable and you can definitely sell them for a bunch of money and buy a car or whatever. Ok, they have a use case because people play the game. But why do they play the game? because they feel like it - there is no "inherent value" to those cards either. Tomorrow, the game goes out of style for whatever reason and the cards are worthless. But today, while people like to play the game, they are valuable. Today, people shop on Amazon. Tomorrow, something changes and they stop shopping on Amazon and Amazon stock falls a lot. There is obviously a difference, but it's not as fundamental as people think.
- vasilipupkin 7y ago
  what's the value of gold? gold has some use case, but its market value far outstrips that use case. The use case of gold is exactly this - that people trade it back and forth in the form of futures, etfs and spot gold.
- petraeus 7y ago
  You sure can if you find somebody willing to take them

village-idiot 7y ago

I’m not sure why anyone in their right minds thought bitcoin was going to be used by random civilians for their everyday transactions. Customers want the protections that banks and credit cards provide, and vendors don’t want to expose themselves to exchange rate risk when selling goods and services. Oh, and 4 transactions a second is far too low a limit for any currency.

gwbas1c 7y ago
For what it's worth, the Bitcoin paper points out that it's an experiment. Most people seem to gloss over and forget this critical point. (I've always been in shock at how many people don't realize that it's a poor currency, but a useful experiment overall.)

jraedisch 7y ago

There is a lot of work done in analyzing holding patterns. Would probably be interesting to see comparison to usage and price of gold as a store of value. For me, buying and holding seems to be legitimate usage. I guess that would count as "speculating". What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0?

Nursie 7y ago
> What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0? Do you expect to increase in price solely because there are a limited amount? There are many things which have that property, but are not good stores of value. Your ability to sell it later for more money is based on continuing demand. Unless there's some other use case, where is that demand going to come from? Isn't some of the value it is allegedly storing based on future expectations of utility?
- ohaideredevs 7y ago
  This is beating a dead horse and the typical argument, but the same can be said for gold. Its "intrinsic value" in terms of practical application is far lower than the market cost given the plentiful substitutes for high current / low heat transmission applications. I really do wonder why Bloomberg hates Bitcoing. If you read through a history of their articles, they REALLY hate it.
  - Nursie 7y ago
    I haven't mentioned intrinsic value once in my post, I agree it's not especially useful to talk about. I'm asking why BTC value should keep going up without some sort of demand beyond people buying because they expect it to go up? Or do you think that's enough?
    - ohaideredevs 7y ago
      If you can answer that for gold & silver, then there is a point in talking about this. If not, the answer is "It's a secure, easily transferable, deflationary store of value. Examples of it being used - Venezuela. Gold is not an option due to crime. The local currency is not an option due to massive inflation.

onychomys 7y ago

Can we talk for a minute about that first graph in the article? "Bitcoin Activity By Category" supposedly lists percentages on the Y axis, but they included the percent sign on the label, making the range go from 0% to 1% instead of from 0 to 1 like they intended. Bloomberg should know better!

eof 7y ago

I'd just like to go on record saying I use it as a payment method for developer services for developers locked out of the western world's banking system. Of course most of these devs will take any of the top N cryptos. As a very early bitcoin adopter who made and lost and made and lost a fortune; I can say that bitcoin and crypto is still "ahead of schedule" for realistic-optimistic timelines of adoption. I still believe cryptocurrency will continue to grow and eventually eat gold; but I am less convinced that it will eat fiat.

sprash 7y ago

The instability and the high fees make it useless for generic payment. The lighting network was supposed to fix latter problem. As soon as the bitcoin price becomes stable it will be useful. As soon as it is useful it will swiftly rise in value and become unstable again. We have already seen several iterations of this cycle. Who knows when this will end.

gwbas1c 7y ago
Which brings up another important point: Typically, when someone wants someone to adopt their currency, they actively work to ensure that the currency has a stable value. Think of historical examples of governments buying and selling each others' gold and silver coins; or more recently governments actively buying and selling gold and silver in their currency; or even more recently governments holding reserves of other countries currency. The historical purpose is to ensure that a currency has a stable value, and is readily available for anyone who wants to use it. No one does this with Bitcoin. The incentives are to use the currency as a speculative bubble, instead of as a means of commerce. Drawing an analogy, in order for Bitcoin to work, there would need to be a "Bitcoin authority" that basically holds a huge reserve of Bitcoin or another commodity, and buys and sells to keep the value stable. Bitcoin goes up in value: Sell Bitcoin for some commodity, Bitcoin goes down in value, sell the commodity for Bitcoin. (Of course, a Bitcoin authority goes against the general anti-government promise of Bitcoin.)

deleted 7y ago

[deleted]

seibelj 7y ago

HN is full of bitter commenters who have been predicting the death of cryptocurrency for a decade, and it hasn’t come true. A community that learned of Bitcoin right as it was invented, dismissed it, and missed out on huge fortunes. Well, some people here thought for themselves and analyzed the technology and ideas on its merits. Just not the people who comment on these posts.

rawrmaan 7y ago
You analyzed Bitcoin on its technologies and merits and concluded that it’s a useful currency? Yikes.
- bdcravens 7y ago
  I don’t think that was the crux of the comment. “.... missed out on huge fortunes” tells you where the focus is.
malvosenior 7y ago
I think Bitcoin pushes a lot of people's buttons because it was so new, exotic and difficult to understand that it really challenged a lot of people who consider themselves smart. I know I didn't "get it" right off the bat but I couldn't shake the feeling that the fact that I didn't understand it was a signal that something special was going on. So I kept pushing forwards. I read the whitepaper and thought, this seems cool but I still don't get it, something must be here. So I read more books (Mastering Bitcoin by O'Reilly is amazing). Finally I got it, understood the potential and realized just how amazing these concepts were. Unfortunately at that point the price had already risen to the point where I couldn't just buy hundreds of these things. I bought a few and now that looks like a freaking amazing investment. During this story arc, I also witnessed a growing dissent against Bitcoin. A lot of it came from the media and tech adjacent people but not technologists themselves. Initial complaints were more or less ad hominems (money for filthy nerds), as the currency went up in value, the story morphed conveniently to an ecological one as the rebuttal for that requires deeper knowledge of crypto and an acknowledgement of the energy consumption used to secure regular money. Now you get on HN and it's just hated. Passionate hate. I figure it's a mix of people that could have understood it and didn't until it was too late, people who still don't understand it, and people who don't like it due to the constant barrage of negative media coverage.

mhuffman 7y ago

This is literally being pumped up by algorithmic traders and no oversight. This rally is designed, as will the next downcycle and the next rally.

raesene9 7y ago

Even a quick look at CoinMarketCap shows you that there's something a little odd about the current rally. Look at the volume column and you'll see that Tether has more volume than bitcoin and has had for a little while. Tether has recently a) Admitted that they don't have 1:1 backing in USD b) They use customer funds for investment rather than just storing them and c) They're currently under investigation by the New York Attorney General. Against that backdrop they've increased the number of Tethers in circulation by $400 million in the last month... Now it's possible that they've got a load of companies who really believe in them to the point that they're eager to invest in Tether (even when there are other 1:1 backed stablecoins available) A different interpretation could be that Tether have worked out they can effectively just print money as much as they want and are using this to buy bitcoins, driving up the price...

nathanasmith 7y ago
>Even a quick look at CoinMarketCap shows you that there's something a little odd about the current rally. >Look at the volume column The really odd thing is getting your volume numbers from CoinMarketCap in the first place when according to this well argued deck[0], 95% of those numbers are fake. What you're looking at there is completely distorted as unregulated exchanges have a huge vested interest in inflating the numbers to dupe projects into paying higher listing fees and since most of the time, the fake volume doesn't track the waning and waxing of the real volume of legitimate exchanges, not only is that fake volume wrong quantitatively but it's also wrong relatively making it worthless and CMC practically worthless by extension though they do claim to be addressing the issue. [0]https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca201901-5164833-183434.pdf https://www.sec.gov/comments/sr-nysearca-2019-01/srnysearca2...
- raesene9 7y ago
  It makes the point about relative volume, even if absolute levels are crap :) The volume point was around a stablecoin with issues having a higher relative volume than bitcoin itself.

cal5k 7y ago

I find it amusing that media doesn't give a crap about Bitcoin until there's price action. This was the exact same type of article that was dominating headlines back in the 2017 run-up. Bitcoin has proved remarkably resilient over the last 10 years. It's clear (to me, anyway) that this asset class/set of technologies is here to stay, it's really just a question of what comes of it. It's actually quite useful to be able to send large quantities of money anywhere in the world without needing a series of intermediaries. For that purpose alone I could see supply limitations leading to increased prices in the long haul. There are also some interesting "layer 2" projects that have been percolating for several years now with a lot of potential to make Bitcoin useful for smaller transactions. The insane hype of the last cycle understandably turned a lot of people off from crypto, but I think it would be a mistake to ignore the progress that's being made.

LiquidSky 7y ago
>Bitcoin has proved remarkably resilient over the last 10 years. What does that even mean? Resilient in what way? As this article notes, it hasn't been adopted for use in any meaningful or significant way. It's a speculation vehicle. I guess in the sense that it didn't literally disappear it's resilient, but beyond that the idea from its early days that it would fundamentally change the world and be widely adopted is gone. It's not the glorious dagger that will pierce the heart of the statist beast its libertarian boosters imagined. The governments, banks, and people of the world have mostly shrugged at it. Ironically, some banks and governments even started adopting the technology for their own uses. It's just a vehicle for speculation and a toy that doesn't seem to have any actually useful applications that couldn't have already been done better. >I think it would be a mistake to ignore the progress that's being made. What progress? It made some speculators rich but is otherwise useless.
- cal5k 7y ago
  Resilient as in despite 10 years of continuous doomsday prognostications, Bitcoin continues to be traded and used around the world. And 1 BTC, this thing that didn't exist 10 years ago, is now worth $8,422.40 USD. As for utility: I've used it to pay contractors in Europe, for example, without having to figure out which money transmittal service is going to rip me off the least. Tons of expats living in North America and Europe use it to send money back to family in their home countries. People use it to hedge against runaway inflation caused by poor monetary policy. It could all fall apart in a few years, sure, but it's damn interesting. Being cynical just means if you're right you get to gloat about it, but if you're wrong you're missing something that could be really important.

berberous 7y ago

I think part of the reason for the dearth of merchant transactions is the lack of a tax safe harbor to treat it like currency, at least for transactions under a certain size. So long as buying a cup of coffee requires one to keep detailed records and report it as a capital gains, it is really not worth the trouble to use Bitcoin as a currency.

netwanderer3 7y ago

I have little doubt BTC price is being manipulated. Its price was kept very low for the longest time so some very powerful organizations such as Bakkt (backed by the same people behind NYSE) could accumulate most of its market supply. At the moment the price is being artificially pumped up to build momentum until enough people from the public buy into it, then its price will once again start dropping faster than gravity. You often can attribute the exact reasons why a stock price went up, but for BTC it seems to be a complete mystery black box that even the most well-versed traders couldn't tell you the exact reasons why it went up. For stock price for example, you just knew in advanced even from last year that Beyond Meat's stock was going to be a hit. "What The Health", an anti meat industry and pro vegans documentary film, was a HUGE success last year and you could see from miles away everything was set up for this trend to become mainstream in 2019 as public sentiments were beginning to swing very positively towards it. For BTC however, everything just seems like a wild guess as no one could pin point exactly what drives its price.

jraedisch 7y ago
Could you elaborate on how one would keep an asset artificially low?
- sprash 7y ago
  You can't. What is more likely is that central banks that can print infinite amounts of their own money are buying up bitcoin in order to make it useless. Bitcoin is seen as competitor by central banks. The same happened to gold. As soon as one entity controlled the vast majority of gold the price ceased to be stable. Central banks already essentially destroyed gold as payment method. If central banks only sell 1% of their gold assets they increase the supply on the actual tradeable market so much that the price can be vastly manipulated. It would be smart if they do the same with bitcoin.
  - jraedisch 7y ago
    Why should all btc holders sell all their holdings, especially if price is steadily rising, since central banks are inflating money supply to buy more?

TrAnn3l 7y ago

I would like to see a comparison to the USD, and how much of the money flow is actually used for merchant transactions.

jraedisch 7y ago

The reason why I think Bitcoin's success (read increasing in wealth infinitely against fiat, albeit slowing down over time) is more probable than its demise is not that it is some kind of replacement religion for me. It is just that I have so far not heard any good arguments why it would not succeed. Of course opponents might say: why should it succeed if they see no reason for it to succeed. That position is completely acceptable to me, but the risk of losing out seems too high for me, so I invest a little bit, just to hedge. And because many people might do that, it could succeed. As long as there are no good arguments against holding a little bit. Which there aren't. Except maybe the ecological footprint. As soon as someone finds a solution to that without sacrificing the other qualities, a hardfork will surely succeed.

nosuchthing 7y ago
There's no point in a hard fork when you can just start fresh, and mint a new network of cryptocurrency. Especially due to the fact that the early cryptocoins like Bitcoin, Ethereum, and Monereo each designed their supplies to dump into a plutocratic distribution.
- jraedisch 7y ago
  I think there is big value in continuity of store of value. People will be easier to convince if they do not lose stake when forking. One would not be buying BTC if one would fear that it can be replaced easily while destroying one's savings.

ykevinator 7y ago

Bitcoin is now a religion.

vpmpaul 7y ago

Media is clueless as usual. Are people spending gold bullion/coins? Nope. The government independent value store is the value of bitcoin.