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Because Bitcoin is (at least theoretically) a currency. You're comparing it to a commodity or store of value. The power of a currency is the ability to trade i

Because Bitcoin is (at least theoretically) a currency. You're comparing it to a commodity or store of value. The power of a currency is the ability to trade it for goods and services. If that is no longer happening with Bitcoin it has morphed into something else entirely.

rwmj 7y ago
I've never owned or traded bitcoin, but as I understand it the main attraction is that it's like the gold standard (of course for people who don't understand why the gold standard was a bad idea).
- JamesBarney 7y ago
  Exactly, like a currency on the gold standard. But not an asset like gold.
- ur-whale 7y ago
  It's nothing like the gold standard. What made the gold standard a bad idea does not apply to Bitcoin.
  - this_user 7y ago
    You mean that there is a cap on the supply that cannot keep pace with the growth of the real economy?
    - noxer 7y ago
      The cap is irrelevant. Instead of printing more the value per unit goes up in the end it does the same it adjust for growth just fine. It's just not practical for a fiat currency to change it's value depending on the economy situation. If for example the USD would have a fix cap and its value would swing with the economy, people would speculate with it. At peaks everyone would want to buy and at the lows everyone would pay salaries and debs etc. the growth isn't the problem the swings and uncertainty about the value makes it unusable for a currency. Bitcoin doesn't have this problem is kinda like gold no one really want to pay with it (beside the bitcoin maxis).
      - this_user 7y ago
        You sound like you know nothing about how currencies actually work. Both exchange rate and purchasing power of the USD do change over time. People do speculate with currencies. And the cap is absolutely not irrelevant if you were to have a global Bitcoin economy. The US would not be able to set the prices on its own, and those would instead be determined by the global market forces. This means the country loses and and all ability to do monetary policy.
        noxer 7y ago
        No one care what you think I know or don't know bring arguments that support your opinion. Whats the mcap of USD? Whats the mcap of EUR? Whats the mcap of Gold? Why does no one know exactly? Because It's irrelevant meaningless and basically impossible to know because of lost units and secret holdings (in case of gold) Ofc people speculate with currencies but not the average joe, whos supposed to use it as a medium of exchange. And that's the whole point. Small fluctuations or small inflation doesn't matter for its use as medium of exchange. The whole "global bitcoin economy" thing wasm't the topic of my post no clue why you tell me this. Also the price of btc is already determined by "global market force" if you wanna call it that way. although it has not much to do with any other market. It's just supply and demand that make the price.
        account73466 7y ago
        >> Whats the mcap of USD? Start here https://fred.stlouisfed.org/graph/?id=CURRSL https://fred.stlouisfed.org/graph/?id=CURRSL, and here https://fredblog.stlouisfed.org/2014/09/how-much-money-is-the-fed-printing/?utm_source=series_page&utm_medium=related_content&utm_term=related_resources&utm_campaign=fredblog https://fredblog.stlouisfed.org/2014/09/how-much-money-is-th... The currency component of USD doubles every 10 years.
        noxer 7y ago
        I didn't ask for the mcap of USD. It was a rhetoric question. Ofc you can find numbers and statistics about it. But they are obviously not correct as stated above they do not include any lost money. Also the value is meaningless. Not a single person on this planet does any educated decision based on that value. It's completely irrelevant. And that was my whole point. If you trade fiat/precious metal or similar assets no chart will ever show the mcap of said asset. But somehow bitcoin and crypto included that value. The only obvious reason that this is a thing, seems to be because crypto space was created by people who have no clue about "money" or how irrelevant the mcap is for these assets.
- cwkoss 7y ago
  Gold standard is great for individuals who want to store wealth, but a bad idea for a fiat currency with policy goals like increasing spending, investment and economic velocity. Deflationary currencies are good stores of value, but slow the economy (because why invest/buy now if your money gets more powerful the longer you refrain from spending it). I think Bitcoin is similar to the gold standard, and its popularity lies in the mismatch of goals between government desires for fiat issuance and individuals for storing value.
  - roenxi 7y ago
    > Deflationary currencies are good stores of value, but slow the economy (because why invest/buy now if your money gets more powerful the longer you refrain from spending it). Logically speaking it is irrelevant; instead of holding gold and calling it money an investor can still hold gold except it gets called an investment; but their holding will perform the same way because it is linked to the value of gold. The practical difference is tax treatment which gets complicated. Theoretically if I recall expected inflation/deflation in the currency doesn't change the economic equilibrium because everyone just factors it in to the interest rates and salary negotiations to keep the focus on real value. And in execution any consistent % inflation/deflation of the money supply makes things weird and confusing because the measuring stick used to measure wealth keeps changing.
- bduerst 7y ago
  Bitcoin attracts three different niche markets: - Crypto enthusiasts who are infatuated with the technology or the math involved - Anti-Fed Libertarian types who want to use something that isn't controlled by a government - HFTs and speculators who either use it in part of their models or as a pump and dump vehicle Some people also use it to buy illegal stuff, but most of them have moved onto Monero as the primary privacy-based cryptocurrency.
  - dehrmann 7y ago
    > Crypto enthusiasts who are infatuated with the technology or the math involved I agree that it attracts these people, but I can't figure out how they make the leap from "clever math" to "this has monetary value and I want in."
  - blaser-waffle 7y ago
    So where do online drug dealers fit in the first 2 options? Or Saudi / Chinese / Russian business types that are trying to extract wealth and avoid the blowback of a regime change? They probably fit under #2 but I certainly wouldn't call a lot of those libertarian in ideology or even in practice, just opportunists.
DennisP 7y ago
Yes, it has morphed. The devs in charge of Bitcoin have purposely abandoned the idea of it being a currency. On-chain transactions are artificially limited to about four per second, and they refuse to change that. They call it a "store of value" now. Other cryptocurrencies are working hard on scaling to the point of being workable currencies.
- bduerst 7y ago
  It's more complex than that. It's the miners, not the devs, on the Bitcoin network refuse to come to a consensus on what Bitcoin should be. It's like a weird 21st-century internet tragedy of the commons.
  - jhatemyjob 7y ago
    This is why I think "decentralization" will never work. It's just a power vacuum, that will be filled/abused one way or the other.
    - bduerst 7y ago
      Precisely. It turns out that despite some of it's flaws, having your currency managed by a central organization that is incentivized for stability tends to work better than a handful of data miners stealing electricity in China.
      - jhatemyjob 7y ago
        And whoever owns the domain https://bitcoin.org https://bitcoin.org.
- xur17 7y ago
  > The devs in charge of Bitcoin have purposely abandoned the idea of it being a currency. On-chain transactions are artificially limited to about four per second, and they refuse to change that. They call it a "store of value" now. I don't think they abandoned the idea of it being a currency, I think they just have different ideas about how exactly to go about scaling it. The block size limit (and therefore the transactions per second limit) was raised 2x rather than significantly more because they don't think scaling onchain is a viable long term solution [0]. Lightning, and other second layer networks have always been discussed as the solution to this scaling problem, and while they are still very early, there's already a fair amount of usage. I work at a company that accepts Bitcoin, and as of today, > 90% of our transaction volume is via lightning. [0] https://en.bitcoin.it/wiki/Block_size_limit_controversy#Arguments_in_opposition_to_increasing_the_blocksize https://en.bitcoin.it/wiki/Block_size_limit_controversy#Argu...
amznthrowaway4 7y ago
BTC has always had more in common with rare gemstones like Taaffeite than currencies or even metals. No practical value, no industrial value, no means to materially change the rate of production, nothing special at all except that it is rare, only a few people care about it, and its price will always depend primarily on the behavior of a very small number of market participants.
ur-whale 7y ago
> Because Bitcoin is (at least theoretically) a currency. Bitcoin is many things, but pinning it as a currency is very reductionist. It can be used as a currency, but in its current form, it isn't very practical (lighting is aiming to, and will likely succeed in fixing that). It is IMOH very much more useful for all the other use cases (eg store of value, doing away with government brain-hared management of fiat currencies, etc ...)
- woofcat 7y ago
  If they didn't want to be a currency they likely should have not used terms like Wallet and have their landing page say "Bitcoin is an innovative payment network and a new kind of money."

rwmj 7y ago

I've never owned or traded bitcoin, but as I understand it the main attraction is that it's like the gold standard (of course for people who don't understand why the gold standard was a bad idea).

JamesBarney 7y ago
Exactly, like a currency on the gold standard. But not an asset like gold.
ur-whale 7y ago
It's nothing like the gold standard. What made the gold standard a bad idea does not apply to Bitcoin.
- this_user 7y ago
  You mean that there is a cap on the supply that cannot keep pace with the growth of the real economy?
  - noxer 7y ago
    The cap is irrelevant. Instead of printing more the value per unit goes up in the end it does the same it adjust for growth just fine. It's just not practical for a fiat currency to change it's value depending on the economy situation. If for example the USD would have a fix cap and its value would swing with the economy, people would speculate with it. At peaks everyone would want to buy and at the lows everyone would pay salaries and debs etc. the growth isn't the problem the swings and uncertainty about the value makes it unusable for a currency. Bitcoin doesn't have this problem is kinda like gold no one really want to pay with it (beside the bitcoin maxis).
    - this_user 7y ago
      You sound like you know nothing about how currencies actually work. Both exchange rate and purchasing power of the USD do change over time. People do speculate with currencies. And the cap is absolutely not irrelevant if you were to have a global Bitcoin economy. The US would not be able to set the prices on its own, and those would instead be determined by the global market forces. This means the country loses and and all ability to do monetary policy.
      - noxer 7y ago
        No one care what you think I know or don't know bring arguments that support your opinion. Whats the mcap of USD? Whats the mcap of EUR? Whats the mcap of Gold? Why does no one know exactly? Because It's irrelevant meaningless and basically impossible to know because of lost units and secret holdings (in case of gold) Ofc people speculate with currencies but not the average joe, whos supposed to use it as a medium of exchange. And that's the whole point. Small fluctuations or small inflation doesn't matter for its use as medium of exchange. The whole "global bitcoin economy" thing wasm't the topic of my post no clue why you tell me this. Also the price of btc is already determined by "global market force" if you wanna call it that way. although it has not much to do with any other market. It's just supply and demand that make the price.
        account73466 7y ago
        >> Whats the mcap of USD? Start here https://fred.stlouisfed.org/graph/?id=CURRSL https://fred.stlouisfed.org/graph/?id=CURRSL, and here https://fredblog.stlouisfed.org/2014/09/how-much-money-is-the-fed-printing/?utm_source=series_page&utm_medium=related_content&utm_term=related_resources&utm_campaign=fredblog https://fredblog.stlouisfed.org/2014/09/how-much-money-is-th... The currency component of USD doubles every 10 years.
        noxer 7y ago
        I didn't ask for the mcap of USD. It was a rhetoric question. Ofc you can find numbers and statistics about it. But they are obviously not correct as stated above they do not include any lost money. Also the value is meaningless. Not a single person on this planet does any educated decision based on that value. It's completely irrelevant. And that was my whole point. If you trade fiat/precious metal or similar assets no chart will ever show the mcap of said asset. But somehow bitcoin and crypto included that value. The only obvious reason that this is a thing, seems to be because crypto space was created by people who have no clue about "money" or how irrelevant the mcap is for these assets.
cwkoss 7y ago
Gold standard is great for individuals who want to store wealth, but a bad idea for a fiat currency with policy goals like increasing spending, investment and economic velocity. Deflationary currencies are good stores of value, but slow the economy (because why invest/buy now if your money gets more powerful the longer you refrain from spending it). I think Bitcoin is similar to the gold standard, and its popularity lies in the mismatch of goals between government desires for fiat issuance and individuals for storing value.
- roenxi 7y ago
  > Deflationary currencies are good stores of value, but slow the economy (because why invest/buy now if your money gets more powerful the longer you refrain from spending it). Logically speaking it is irrelevant; instead of holding gold and calling it money an investor can still hold gold except it gets called an investment; but their holding will perform the same way because it is linked to the value of gold. The practical difference is tax treatment which gets complicated. Theoretically if I recall expected inflation/deflation in the currency doesn't change the economic equilibrium because everyone just factors it in to the interest rates and salary negotiations to keep the focus on real value. And in execution any consistent % inflation/deflation of the money supply makes things weird and confusing because the measuring stick used to measure wealth keeps changing.
bduerst 7y ago
Bitcoin attracts three different niche markets: - Crypto enthusiasts who are infatuated with the technology or the math involved - Anti-Fed Libertarian types who want to use something that isn't controlled by a government - HFTs and speculators who either use it in part of their models or as a pump and dump vehicle Some people also use it to buy illegal stuff, but most of them have moved onto Monero as the primary privacy-based cryptocurrency.
- dehrmann 7y ago
  > Crypto enthusiasts who are infatuated with the technology or the math involved I agree that it attracts these people, but I can't figure out how they make the leap from "clever math" to "this has monetary value and I want in."
- blaser-waffle 7y ago
  So where do online drug dealers fit in the first 2 options? Or Saudi / Chinese / Russian business types that are trying to extract wealth and avoid the blowback of a regime change? They probably fit under #2 but I certainly wouldn't call a lot of those libertarian in ideology or even in practice, just opportunists.

DennisP 7y ago

Yes, it has morphed. The devs in charge of Bitcoin have purposely abandoned the idea of it being a currency. On-chain transactions are artificially limited to about four per second, and they refuse to change that. They call it a "store of value" now. Other cryptocurrencies are working hard on scaling to the point of being workable currencies.

bduerst 7y ago
It's more complex than that. It's the miners, not the devs, on the Bitcoin network refuse to come to a consensus on what Bitcoin should be. It's like a weird 21st-century internet tragedy of the commons.
- jhatemyjob 7y ago
  This is why I think "decentralization" will never work. It's just a power vacuum, that will be filled/abused one way or the other.
  - bduerst 7y ago
    Precisely. It turns out that despite some of it's flaws, having your currency managed by a central organization that is incentivized for stability tends to work better than a handful of data miners stealing electricity in China.
    - jhatemyjob 7y ago
      And whoever owns the domain https://bitcoin.org https://bitcoin.org.
xur17 7y ago
> The devs in charge of Bitcoin have purposely abandoned the idea of it being a currency. On-chain transactions are artificially limited to about four per second, and they refuse to change that. They call it a "store of value" now. I don't think they abandoned the idea of it being a currency, I think they just have different ideas about how exactly to go about scaling it. The block size limit (and therefore the transactions per second limit) was raised 2x rather than significantly more because they don't think scaling onchain is a viable long term solution [0]. Lightning, and other second layer networks have always been discussed as the solution to this scaling problem, and while they are still very early, there's already a fair amount of usage. I work at a company that accepts Bitcoin, and as of today, > 90% of our transaction volume is via lightning. [0] https://en.bitcoin.it/wiki/Block_size_limit_controversy#Arguments_in_opposition_to_increasing_the_blocksize https://en.bitcoin.it/wiki/Block_size_limit_controversy#Argu...

amznthrowaway4 7y ago

BTC has always had more in common with rare gemstones like Taaffeite than currencies or even metals. No practical value, no industrial value, no means to materially change the rate of production, nothing special at all except that it is rare, only a few people care about it, and its price will always depend primarily on the behavior of a very small number of market participants.

ur-whale 7y ago

> Because Bitcoin is (at least theoretically) a currency. Bitcoin is many things, but pinning it as a currency is very reductionist. It can be used as a currency, but in its current form, it isn't very practical (lighting is aiming to, and will likely succeed in fixing that). It is IMOH very much more useful for all the other use cases (eg store of value, doing away with government brain-hared management of fiat currencies, etc ...)

woofcat 7y ago
If they didn't want to be a currency they likely should have not used terms like Wallet and have their landing page say "Bitcoin is an innovative payment network and a new kind of money."