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It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/b

It's important to remember that the main thing Bitcoin needs to maintain is it's monetary policy and you can find it at any time right here https://github.com/bitcoin/bitcoin/blob/master/src/validation.cpp#L1238-L1249 https://github.com/bitcoin/bitcoin/blob/master/src/validatio... Anyone can query at any time the total amount of Bitcoin that have been issued without relying on anyone. After downloading the Bitcoin client just run gettxoutsetinfo You can try to guess how many dollars have been printed or how many bars of gold exist. If you view Bitcoin as a payment network like VISA then obviously there are many things the network needs to improve but if you view it as a savings technology then it's the best one that's ever been created. I never understood how "But Can I buy Starbucks with Bitcoin" became a meme, I don't expect to be able to buy Starbucks with Apple stock. Claims that Bitcoin burns useless energy or doesn't have feature X completely miss the point. Avoiding capital controls like in Lebanon, protecting yourself from hyperinflation due to corrupt governments with a printing press like Venezuela are Bitcoin's killer features. It's common to view hyperinflation as something unique to corrupt countries but that's only because CPI is a dishonest way to aggregate inflation data. Inflation is a vector NOT a real number, any asset that people care about has become generally unaffordable i.e: housing, education, healthcare. BS crypto vendors are looking for the next big application of blockchain technology when inflation protection and avoiding capital controls are arguably the most impactful innovation since the internet. Bitcoin and Time are the only 2 scarce assets that exist in this world.

pavlov 6y ago
> “if you view it as a savings technology then it's the best one that's ever been created” IMO this crown belongs to ETFs. Putting all your eggs in the Bitcoin basket would be an extremely risky strategy. A portfolio of ETFs is a much better place for most people’s savings.
- xiphias2 6y ago
  ETFs are all managed by the banking system that I'm happy to be outside of at this point. Thanks, but no thanks to GLD and other scams that ,,may send the value of gold in dollars if it doesn't have enough''
- H8crilA 6y ago
  ETFs are simply mutual funds married with high frequency trading. Read about Authorized Participants if you're confused as to what HFT has to do with ETFs. Overall it's a decent improvement over the very old idea of open-ended funds, given the recent digitalisation of trading and super fast market making with tiny spreads. PS. I like ETFs, I think they're achieving exactly what are they supposed to achieve.
  - mmsmatt 6y ago
    Also, read the prospectus of any ETF you already own, and you’ll get the gist of APs, enough to understand why your fees are so low.
    - H8crilA 6y ago
      There's also securities lending (to short sellers), many ETF sponsors retain all proceeds from securities lending for themselves. This is similar to how many brokerages earn most of their revenues by taking a spread on cash balances, so they can charge very little on transaction costs (i.e., they pay you less for unused cash than money markets pay them). After all borrowing money is the same as shorting cash, so there's nice symmetry here :)
- kneel 6y ago
  ETFs are still subject to whatever country's tax laws. Imagine putting your retirement into various funds only to have a Brexit type situation destroy your hard earned money. Bitcoin is borderless, permissionless storage of value. Game theory built in (anyone powerful enough to attack the network is better incentivized to participate in it.)
  - JumpCrisscross 6y ago
    > still subject to whatever country's tax laws So is Bitcoin.
    - kneel 6y ago
      Bitcoin is only subject to tax if you move it back into the controlled financial system. Otherwise it's just numbers hopping around anonymously on a ledger.
      - JumpCrisscross 6y ago
        > Otherwise it's just numbers hopping around anonymously on a ledger That’s tax evasion. I know it’s chic to be callous about tax fraud in some cryptocurrency circles. But the same has been true of cash, art and bearer bonds for centuries.
        kneel 6y ago
        It's not tax evasion if the hops are non taxable events, and the privacy of wallets enable anyone to deny it. This is why Bitcoin is an existential threat to government power. I personally think it's empowering and great for the individual, however if you tend towards more statist views then this would seem like anarchy.
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JumpCrisscross 6y ago
> if you view it as a savings technology then it's the best one that's ever been created Bitcoin is a terrible savings vehicle for the same reason cash in checking accounts or collectibles are: there is no basis for its value. Baseless assets other than gold have been numerously proposed, usually about once every generation in every cultural sphere going back to Republican Roman times, but unvaryingly fall out of favor. This is why savvy portfolios consist of productive assets, not Beanie Babies.
- rusk 6y ago
  It’s automated fiat.
- Geee 6y ago
  That's exactly why Bitcoin is interesting. It is currently being accepted as having it's own value, just like gold. It's an experiment that seems to be working. Cash or collectibles don't have the same monetary properties as bitcoin or gold. Most importantly, they can be created from thin air.
  - AstralStorm 6y ago
    Bitcoin does not have value of its own. What can you do with a Bitcoin as printed code or eWallet without functioning Bitcoin economy? It is fiat tied to used value not means to gain value. On the other hand, you can manufacture useful things from metals, including precious metals. Heck, even old school non-precious metal coins have some of that value.
    - dnautics 6y ago
      that's not why gold is valuable, historically. Historically gold is valuable because it's rivalrous, fungible, and most importantly, easily verifiable. You can assess approximate purity of the metal with very low-level technology (https://en.wikipedia.org/wiki/Touchstone_(assaying_tool) https://en.wikipedia.org/wiki/Touchstone_(assaying_tool)). Transactions thus have a lowered barrier of trust. Before gold and money, you could only transact in debt to labor (see debt: 5000 years) or socialized obligations, and to be sure the person would conduct that labor, you had to trust them, or trust society to honor the obligation. More interestingly in particular, once gold came into being, two people could reliable transact over a very long social distances, (without necessarily knowing each other's reputation). You just had to trust an intermediary party to transport the gold. Nonetheless, that opened markets up considerably.
petertodd 6y ago
> Avoiding capital controls like in Lebanon I personally know someone whose Lebanese family had food on the table for awhile in large part because of Bitcoin. They aren't even particularly interested in Bitcoin. It just happened to be the thing that worked best for their situation. I live in a Canadian neighboorhood with lots of immigrants from poorer countries. There's a Bitcoin ATM near me that seems to get a decent amount of usage, mostly by people who look like they might have family in other countries. It might get even more usage, if not for the fact that buying Bitcoin in Canada is pretty easy via exchanges like Kraken and Bull Bitcoin.
- geofft 6y ago
  How do they actually use that Bitcoin to buy things of real value like food on the table? That is, if you're a family in Lebanon, what actual steps do you go through, having received some bitcoin from somewhere, to get some flour or chickpeas or whatever in your hand? Do you exchange the Bitcoin for local currency first (and if so, how) or do you pay the mill or butcher directly in Bitcoin (and what do they do with it at that point)?
  - formalsystem 6y ago
    You would go to an exchange and get local currency or US dollars instead if you need to spend it. But most people I know are just interested in it so they can preserve their wealth by bypassing capital controls. I’m Lebanese
    - geofft 6y ago
      Is the conversion to local currency not affected by inflation? Or if you convert it to US dollars, how do those US dollars get to the country and get past capital controls? I'm specifically not asking about preserving wealth in the abstract - I'm curious about the mechanics of how it's used to put food on the table. I guess maybe the question I should be asking is, who are the people who run the exchanges and how do they work? Why are they interested in accepting Bitcoin in exchange for more liquid currency, and where did they get that liquid currency in the first place? How do they determine the conversion rate? (Are they wealthy locals who already have lots of cash holdings who want to be wealthier and are willing to sell that cash for Bitcoin at a premium because they intend to hold the Bitcoin long-term / after major political changes?)
xiphias2 6y ago
,,inflation protection and avoiding capital controls are arguably the most impactful innovation since the internet'' I have lived before the internet, and asked myself the question if I would choose that world without internet, or go back to inflating my money, and for me it's obvious: I would rather give back internet than Bitcoin if I had to choose. Of course as Bitcoin sits mostly on top of internet, something like this is technically almost impossible :)
ChomskyNormal4m 6y ago
> inflation protection and avoiding capital controls are arguably the most impactful innovation since the internet Inflation protection? Bitcoin lost one third of its value in the past three years. How is that inflation protection? You would have done better to hold most commodities or most currencies in that time period to protect from inflation, other than Bitcoin.
- jakupovic 6y ago
  That's only for the People who bought at the top and sold. For the vast majority of people BTC has outperformed any other investment for majority of trading days.
  - deleted 6y ago
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- martinko 6y ago
  Picking arbitrary dates is fun and all, but we are bootstrapping a new financial system. Do you see a way to do that without volatility?
  - SpicyLemonZest 6y ago
    I don't blame Bitcoin for being volatile. I just don't see how its volatility is consistent with the claim that it represents an innovation in protection against inflation.
    - martinko 6y ago
      Again, we are bootstrapping a financial system. Volatility is to be expected. Volatility will decrease with time (lindy effect, adoption, etc.) as it has from the beginning. In the asymptotic target state, btc is the only true scarce asset in the world, uncensorable and with instant global transfers.
      - 6y ago
joosters 6y ago
You can try to guess how many dollars have been printed or how many bars of gold exist. No-one in their day-to-day usage of dollars (or gold) directly cares how many currency units exist. What they care about - and what is very easy to know, is what the purchasing power of their currency is.
- qes 6y ago
  and what is not easy to know or perceive is the gradual reduction of your currency's purchasing power over time due to inflating supply.
- noch 6y ago
  > No-one in their day-to-day usage of dollars (or gold) directly cares how many currency units exist. This is an artefact of economic policy and education that has brainwashed us into believing in the time value of money, that is "money now is worth more than the same amount of money in the future." This directly implies a preference for debt and consumption over saving. But the fact is that the purchasing power of a currency is a function of its supply relative to the productivity of the workers in the economy, not the discretionary consumption of individuals in the economy. That is, a currency is only useful to the extent that it allows us to value productivity accurately. Productivity increases over time, therefore goods and services should become cheaper relative to dollars, that is, a constant amount of money I hold should be worth more — able to buy me more stuff — in the future than it is now. If you don't care how many actual dollars exist, then fundamentally, you and all the other market actors have no way of discovering the true price of anything. It's all just guesswork, with someone else (the government) putting a thumb on the scale to increase asset prices. The price of what you just bought is whatever you were convinced to pay for it with varying relation to its actual value. Consider: we don't actually know the value of houses. A couple goes to buy a house and immediately takes out a mortgage to pay >40% of the quoted price. So house owners are incentivised to quote higher prices because of mortgage availability. Contractors and developers similarly inflate prices of their services. Similarly with materials suppliers and landholders. The entire market is distorted because we don't know and don't care and are encouraged not to care how many dollars there are in existence relative to the productivity of humans. It's not entirely an evil conspiracy in which most of us participate but it is a terrible accident humanity has found itself in. So, think from first principles and ask yourself: what is the true value of the thing I just bought. It's a helpful exercise in day to day life.
ojnabieoot 6y ago
> but if you view it as a savings technology then it's the best one that's ever been created. I am sorry but this is just silly and reckless. Although bitcoin is somewhat less noisy than it used to be, it is still a volatile and extremely high-risk investment. Whatever merit bitcoin might have on the long-term economic fundamentals, right now bitcoin is mostly a speculative instrument, or an investment on computing technology. You do not want to put your savings into something where the price has repeatedly dropped > 60% in a single week. It can be part of a larger strategy: I could see x treasury bonds, (1 - x) bitcoin as a sensible high-risk tactic. But putting all your savings in bitcoin is dangerous.
- rusk 6y ago
  The price has continuously gone up overall at a rate greater than inflation. Yes if you had bought at a peak you would have lost out alright,but overall it has been steady. That said, yeah it’s probs not a good idea putting all your money in it. Black swans abound with any new technology.
  - ojnabieoot 6y ago
    > The price has continuously gone up overall at a rate greater than inflation. This is true but a) there's no reason to think this will be true for another 10 years, and b) if you had invested in November 2013, you wouldn't have seen a profit until 2017. 4 years of being in the red is a hard pill to swallow if you're not diversified. Things that might look really bad for months, but work out in the end are better investments than savings. I think it's just silly to pretend Bitcoin is anything but a) an interesting technology that enables a lot of cool internet finance tech and helps people who live in countries with profoundly unstable economies b) a risky speculative investment on something that's correlated with the price of CPUs, graphics cards, and electricity, and is prone to major supply shocks
    - qes 6y ago
      > if you had invested in November 2013 Cherry picking the singularly worst point. > 4 years of being in the red is a hard pill to swallow For which you would've been rewarded with nearly all of the months since 2017 with 500%+ gain, and as of now and also for quite a number of months since 2017, 1000%+ gain. > there's no reason to think this will be true for another 10 years Just one more bull run like those previous is going to put Nov '13 buyers at 10,000% gains, and if history comes close to repeating itself that will occur within 2 years. > if you're not diversified then you disregarded the single most repeated quip of investing advice in the bitcoin community - no more than you can afford to lose.
trident1000 6y ago
Also means people can save without needing to be financial wizards to not lose much of what they have over their lifetimes. Keeping what you earn in real terms over a lifetime should not be as complicated as it is today.
- wmf 6y ago
  Target date funds aren't complicated at all.
  - trident1000 6y ago
    Many people in the US and elsewhere dont even know what that is. Know whats way easier? Holding a global non-inflatable reserve currency and forgetting the rest of the BS.
    - deleted 6y ago
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  - BMSmnqXAE4yfe1 6y ago
    There is a lot of young people who think that stocks only ever go up. Wait until the the stock market crashes, and target date funds with it.
    - wmf 6y ago
      Target date funds aren't all stocks specifically to avoid this problem.
      - BMSmnqXAE4yfe1 6y ago
        "Target date" means the ratio of stocks to bonds in them is getting rebalanced each year - the closer the target date (retirement), more bonds and less stocks. They have 60% or more in stocks.
    - UncleMeat 6y ago
DennisP 6y ago
The fact that bitcoins can be transferred is the only reason they have value at all. You have to be able to exchange them for something else or they're worthless. The question then is whether 7 tx/sec really is sufficient to support broad global adoption, even if it's just for savings. Dollars and physical gold have no such limits. Other blockchains are vastly expanding scalability, as well as eliminating the energy usage. Another issue is whether Bitcoin can maintain its monetary policy for the long term. Here's a paper from Princeton saying that if miner rewards are dominated by transaction fees rather than block rewards, the chain destabilizes, suffering frequent long rollbacks. https://www.cs.princeton.edu/~arvindn/publications/mining_CCS.pdf https://www.cs.princeton.edu/~arvindn/publications/mining_CC... If they're right, some future generation of bitcoiners will have to choose between keeping the issuance schedule, and having a blockchain that functions reliably. There's no way for us to know which they will pick. Personally, I think the right choice is a functioning chain. That last percent or two of inflation isn't a problem for maintaining value, because economies grow at the same rate. So does the supply of gold in the economy.
- slickrick216 6y ago
  “ The question then is whether 7 tx/sec really is sufficient to support broad global adoption, even if it's just for savings. Dollars and physical gold have no such limits.” Yes they do, it takes even longer to move physical dollars or gold around and depending on where and who you are sending them too it might be impossible. Sure in some mainstream cases you can send the digital derivative of gold and dollars to someone but those aren’t the actual asset just a representation issued by a centralized entity or a collection of them. Visas payment network isn’t moving dollars it’s moving digital dollars. Same with gold etfs. Let’s see them try to seize bitcoin and stop transfers it’s much harder
  - DennisP 6y ago
    Their latency is high but they are massively parallel. There's no practical limit on global throughput. To get low latency on dollars/gold you have to go with centralized digital representations, but Bitcoin has to do the same to get more than 7 tx/sec. I might still be a fan if that were the only option, but with other blockchains eliminating this restriction I have a hard time seeing the long-term value proposition of Bitcoin specifically.
shajznnckfke 6y ago
> Inflation is a vector NOT a real number, any asset that people care about has become generally unaffordable i.e: housing, education, healthcare. Inflation is not the cause of unaffordability in those areas, the cause is limited supply. Using bitcoin as our currency wouldn’t make more houses, more medical professionals, or less administrative bloat in universities. However, it would probably mean a complete collapse of the economy during times like these when a central bank can intervene to stabilize things.
disown 6y ago
> I never understood how "But Can I buy Starbucks with Bitcoin" became a meme That's disingenuous. It became a "meme" because for many years, bitcoin evangelists touted bitcoin as a currency replacement. You can buy pizza with bitcoins! Remember? It has and still is being sold as a virtual currency - after all you can't have cryptocurrency without currency. > I don't expect to be able to buy Starbucks with Apple stock. But you can actually buy goods with bitcoins... You fall into the same trap as all evangelists, self-contradiction. I like bitcoins, I like cryptocurrencies, think the future is bright for blockchain tech. I just don't like bullshit.
- pwm 6y ago
  Interestingly Satoshi wrote about the similarities between bitcoin and gold/precious metals multiple times, eg. [1], [2]. I guess it's not black and white and maybe bitcoin organically transitions from digital cash to digital gold. We'll see how it all plays out over time. [1] https://bitcointalk.org/index.php?topic=583.msg11405#msg11405 https://bitcointalk.org/index.php?topic=583.msg11405#msg1140... [2] http://p2pfoundation.ning.com/forum/topics/bitcoin-open-source?commentId=2003008%3AComment%3A9562 http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour...
hn3333 6y ago
Let's be realistic. The application for bitcoins is buying drugs in the darknet, extortion and money laundering. Not more, not less.
opportune 6y ago
The idea of bitcoin as a store of value and not a currency is a revisionist interpretation that became popular with the blockstream devs around 2017-18 when it became apparent that the bitcoin network was unsuitable for handling payments at scale and had fees too high to be useful for mundane payments.
- doopy1 6y ago
  Exactly! The first sentence from the original white paper is literally: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution." Bitcoin was intended to be MONEY, instead it's pretty fucking useless for anything other than hoarding. I think it will remain an asset class, but history will not be kind to it. It's going to remain relevant and valuable as an "antique", but likely there will come a cryptocurrency that realizes the original goal at some point.
  - R0b0t1 6y ago
    It is money in an important way not shared by dollars: it can't be devalued. Based on current valuation people see this as extremely desirable.
  - bitreality 6y ago
    Bitcoin is the first successful project which achieved digital scarcity. Scarcity is one of the most important features in assigning value to a particular object. Bitcoin's scarcity is not only proven, but also completely transparent and trackable. Its scarcity does not rely on any centralized organization, it is completely based on mathematics and cryptography. It may not have been apparent how ground-breaking or important digital scarcity was at the time. Most of the time when we think of money, we think about how we use it in our everyday lives. We buy coffees, we pay for an Uber. But underneath all that, there is a deeper meaning to money. Why do we value money? It really just boils down to scarcity, liquidity, demand. Money has all 3. However, the scarcity factor of traditional money is flawed. It relies on centralized parties, for which money is not actually scarce. They can and do alter the supply at any time. It's a tradeoff we make because fiat is so liquid / demanded / transactable. Bitcoin is less transactable than fiat money in most regards, but it makes up for it in the transparency of its scarcity. If you were going to lock your wealth up for 25 years, would you put it in USD or BTC? More and more people would say BTC. I can tell you how many BTC will exist in the year 2050. I would have no way to do the same for any fiat currency. The main risk to BTC is some sort of technological breakthrough which greatly improves upon the concept of cryptocurrency. It's not that cryptocurrency will suddenly disappear or lose its value. Cryptocurrency is here to stay. We have witnessed the birth of a new asset class.
pjc50 6y ago
> Inflation is a vector NOT a real number, any asset that people care about has become generally unaffordable i.e: housing, education, healthcare. You came so close to realising it, but this is the real reason why Bitcoin can't deliver price stability long term - prices move relative to one another in the real economy. You can't preserve purchasing power by simply limiting money issuance, because exogenous economic shocks are real. (also, Bitcoin can't prevent the Tether people from printing Tether and buying bitcoin with it ...)
lukev 6y ago
As someone who mined a bunch of Bitcoin back in the early days, I can state that this is a completely ahistorical viewpoint. Bitcoin was _absolutely_ touted as "digital cash" early on. The earliest transactions of Bitcoins were each news items in the community and the each new vendor that accepted it as payment was put forth as proof of Bitcoin's traction. Also comparing it to Apple stock is misleading. Stock represents an ownership stake in the assets of a real-world entity. Bitcoin only has value to the extent that it is collectively agreed to have value; a trait shared with currencies (and commodities with little/no utility such as gold, cowrie shells, etc.)
- rkagerer 6y ago
  Instead of "little/no utility" I'd say "price completely disconnected from utility". Gold is used in lots of things, such as electronics and plating cowrie shells.
Temasik 6y ago
hodl my pokemon card
bufferoverflow 6y ago
> I never understood how "But Can I buy Starbucks with Bitcoin" became a meme Because you've never read the white paper. Which is titled "Bitcoin: A Peer-to-Peer Electronic Cash System". Unfortunately the payment aspect of bitcoin got ruined by the people who decided to lock the block size at 1MB (+segwit). Which resulted in blocks being permanently full, transaction pools clogged, and transactions fees insanely high.
appleflaxen 6y ago
that was... an incredibly well-articulated point. you just convinced me to buy some bitcoin.
ZeteticElench 6y ago
What if sha256 hash is broken? Then all bitcoin becomes worthless.

pavlov 6y ago

> “if you view it as a savings technology then it's the best one that's ever been created” IMO this crown belongs to ETFs. Putting all your eggs in the Bitcoin basket would be an extremely risky strategy. A portfolio of ETFs is a much better place for most people’s savings.

xiphias2 6y ago
ETFs are all managed by the banking system that I'm happy to be outside of at this point. Thanks, but no thanks to GLD and other scams that ,,may send the value of gold in dollars if it doesn't have enough''
H8crilA 6y ago
ETFs are simply mutual funds married with high frequency trading. Read about Authorized Participants if you're confused as to what HFT has to do with ETFs. Overall it's a decent improvement over the very old idea of open-ended funds, given the recent digitalisation of trading and super fast market making with tiny spreads. PS. I like ETFs, I think they're achieving exactly what are they supposed to achieve.
- mmsmatt 6y ago
  Also, read the prospectus of any ETF you already own, and you’ll get the gist of APs, enough to understand why your fees are so low.
  - H8crilA 6y ago
    There's also securities lending (to short sellers), many ETF sponsors retain all proceeds from securities lending for themselves. This is similar to how many brokerages earn most of their revenues by taking a spread on cash balances, so they can charge very little on transaction costs (i.e., they pay you less for unused cash than money markets pay them). After all borrowing money is the same as shorting cash, so there's nice symmetry here :)
kneel 6y ago
ETFs are still subject to whatever country's tax laws. Imagine putting your retirement into various funds only to have a Brexit type situation destroy your hard earned money. Bitcoin is borderless, permissionless storage of value. Game theory built in (anyone powerful enough to attack the network is better incentivized to participate in it.)
- JumpCrisscross 6y ago
  > still subject to whatever country's tax laws So is Bitcoin.
  - kneel 6y ago
    Bitcoin is only subject to tax if you move it back into the controlled financial system. Otherwise it's just numbers hopping around anonymously on a ledger.
    - JumpCrisscross 6y ago
      > Otherwise it's just numbers hopping around anonymously on a ledger That’s tax evasion. I know it’s chic to be callous about tax fraud in some cryptocurrency circles. But the same has been true of cash, art and bearer bonds for centuries.
      - kneel 6y ago
        It's not tax evasion if the hops are non taxable events, and the privacy of wallets enable anyone to deny it. This is why Bitcoin is an existential threat to government power. I personally think it's empowering and great for the individual, however if you tend towards more statist views then this would seem like anarchy.
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JumpCrisscross 6y ago

> if you view it as a savings technology then it's the best one that's ever been created Bitcoin is a terrible savings vehicle for the same reason cash in checking accounts or collectibles are: there is no basis for its value. Baseless assets other than gold have been numerously proposed, usually about once every generation in every cultural sphere going back to Republican Roman times, but unvaryingly fall out of favor. This is why savvy portfolios consist of productive assets, not Beanie Babies.

rusk 6y ago
It’s automated fiat.
Geee 6y ago
That's exactly why Bitcoin is interesting. It is currently being accepted as having it's own value, just like gold. It's an experiment that seems to be working. Cash or collectibles don't have the same monetary properties as bitcoin or gold. Most importantly, they can be created from thin air.
- AstralStorm 6y ago
  Bitcoin does not have value of its own. What can you do with a Bitcoin as printed code or eWallet without functioning Bitcoin economy? It is fiat tied to used value not means to gain value. On the other hand, you can manufacture useful things from metals, including precious metals. Heck, even old school non-precious metal coins have some of that value.
  - dnautics 6y ago
    that's not why gold is valuable, historically. Historically gold is valuable because it's rivalrous, fungible, and most importantly, easily verifiable. You can assess approximate purity of the metal with very low-level technology (https://en.wikipedia.org/wiki/Touchstone_(assaying_tool) https://en.wikipedia.org/wiki/Touchstone_(assaying_tool)). Transactions thus have a lowered barrier of trust. Before gold and money, you could only transact in debt to labor (see debt: 5000 years) or socialized obligations, and to be sure the person would conduct that labor, you had to trust them, or trust society to honor the obligation. More interestingly in particular, once gold came into being, two people could reliable transact over a very long social distances, (without necessarily knowing each other's reputation). You just had to trust an intermediary party to transport the gold. Nonetheless, that opened markets up considerably.

petertodd 6y ago

> Avoiding capital controls like in Lebanon I personally know someone whose Lebanese family had food on the table for awhile in large part because of Bitcoin. They aren't even particularly interested in Bitcoin. It just happened to be the thing that worked best for their situation. I live in a Canadian neighboorhood with lots of immigrants from poorer countries. There's a Bitcoin ATM near me that seems to get a decent amount of usage, mostly by people who look like they might have family in other countries. It might get even more usage, if not for the fact that buying Bitcoin in Canada is pretty easy via exchanges like Kraken and Bull Bitcoin.

geofft 6y ago
How do they actually use that Bitcoin to buy things of real value like food on the table? That is, if you're a family in Lebanon, what actual steps do you go through, having received some bitcoin from somewhere, to get some flour or chickpeas or whatever in your hand? Do you exchange the Bitcoin for local currency first (and if so, how) or do you pay the mill or butcher directly in Bitcoin (and what do they do with it at that point)?
- formalsystem 6y ago
  You would go to an exchange and get local currency or US dollars instead if you need to spend it. But most people I know are just interested in it so they can preserve their wealth by bypassing capital controls. I’m Lebanese
  - geofft 6y ago
    Is the conversion to local currency not affected by inflation? Or if you convert it to US dollars, how do those US dollars get to the country and get past capital controls? I'm specifically not asking about preserving wealth in the abstract - I'm curious about the mechanics of how it's used to put food on the table. I guess maybe the question I should be asking is, who are the people who run the exchanges and how do they work? Why are they interested in accepting Bitcoin in exchange for more liquid currency, and where did they get that liquid currency in the first place? How do they determine the conversion rate? (Are they wealthy locals who already have lots of cash holdings who want to be wealthier and are willing to sell that cash for Bitcoin at a premium because they intend to hold the Bitcoin long-term / after major political changes?)

xiphias2 6y ago

,,inflation protection and avoiding capital controls are arguably the most impactful innovation since the internet'' I have lived before the internet, and asked myself the question if I would choose that world without internet, or go back to inflating my money, and for me it's obvious: I would rather give back internet than Bitcoin if I had to choose. Of course as Bitcoin sits mostly on top of internet, something like this is technically almost impossible :)

ChomskyNormal4m 6y ago

> inflation protection and avoiding capital controls are arguably the most impactful innovation since the internet Inflation protection? Bitcoin lost one third of its value in the past three years. How is that inflation protection? You would have done better to hold most commodities or most currencies in that time period to protect from inflation, other than Bitcoin.

jakupovic 6y ago
That's only for the People who bought at the top and sold. For the vast majority of people BTC has outperformed any other investment for majority of trading days.
- deleted 6y ago
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martinko 6y ago
Picking arbitrary dates is fun and all, but we are bootstrapping a new financial system. Do you see a way to do that without volatility?
- SpicyLemonZest 6y ago
  I don't blame Bitcoin for being volatile. I just don't see how its volatility is consistent with the claim that it represents an innovation in protection against inflation.
  - martinko 6y ago
    Again, we are bootstrapping a financial system. Volatility is to be expected. Volatility will decrease with time (lindy effect, adoption, etc.) as it has from the beginning. In the asymptotic target state, btc is the only true scarce asset in the world, uncensorable and with instant global transfers.
    - 6y ago

joosters 6y ago

You can try to guess how many dollars have been printed or how many bars of gold exist. No-one in their day-to-day usage of dollars (or gold) directly cares how many currency units exist. What they care about - and what is very easy to know, is what the purchasing power of their currency is.

qes 6y ago
and what is not easy to know or perceive is the gradual reduction of your currency's purchasing power over time due to inflating supply.
noch 6y ago
> No-one in their day-to-day usage of dollars (or gold) directly cares how many currency units exist. This is an artefact of economic policy and education that has brainwashed us into believing in the time value of money, that is "money now is worth more than the same amount of money in the future." This directly implies a preference for debt and consumption over saving. But the fact is that the purchasing power of a currency is a function of its supply relative to the productivity of the workers in the economy, not the discretionary consumption of individuals in the economy. That is, a currency is only useful to the extent that it allows us to value productivity accurately. Productivity increases over time, therefore goods and services should become cheaper relative to dollars, that is, a constant amount of money I hold should be worth more — able to buy me more stuff — in the future than it is now. If you don't care how many actual dollars exist, then fundamentally, you and all the other market actors have no way of discovering the true price of anything. It's all just guesswork, with someone else (the government) putting a thumb on the scale to increase asset prices. The price of what you just bought is whatever you were convinced to pay for it with varying relation to its actual value. Consider: we don't actually know the value of houses. A couple goes to buy a house and immediately takes out a mortgage to pay >40% of the quoted price. So house owners are incentivised to quote higher prices because of mortgage availability. Contractors and developers similarly inflate prices of their services. Similarly with materials suppliers and landholders. The entire market is distorted because we don't know and don't care and are encouraged not to care how many dollars there are in existence relative to the productivity of humans. It's not entirely an evil conspiracy in which most of us participate but it is a terrible accident humanity has found itself in. So, think from first principles and ask yourself: what is the true value of the thing I just bought. It's a helpful exercise in day to day life.

ojnabieoot 6y ago

> but if you view it as a savings technology then it's the best one that's ever been created. I am sorry but this is just silly and reckless. Although bitcoin is somewhat less noisy than it used to be, it is still a volatile and extremely high-risk investment. Whatever merit bitcoin might have on the long-term economic fundamentals, right now bitcoin is mostly a speculative instrument, or an investment on computing technology. You do not want to put your savings into something where the price has repeatedly dropped > 60% in a single week. It can be part of a larger strategy: I could see x treasury bonds, (1 - x) bitcoin as a sensible high-risk tactic. But putting all your savings in bitcoin is dangerous.

rusk 6y ago
The price has continuously gone up overall at a rate greater than inflation. Yes if you had bought at a peak you would have lost out alright,but overall it has been steady. That said, yeah it’s probs not a good idea putting all your money in it. Black swans abound with any new technology.
- ojnabieoot 6y ago
  > The price has continuously gone up overall at a rate greater than inflation. This is true but a) there's no reason to think this will be true for another 10 years, and b) if you had invested in November 2013, you wouldn't have seen a profit until 2017. 4 years of being in the red is a hard pill to swallow if you're not diversified. Things that might look really bad for months, but work out in the end are better investments than savings. I think it's just silly to pretend Bitcoin is anything but a) an interesting technology that enables a lot of cool internet finance tech and helps people who live in countries with profoundly unstable economies b) a risky speculative investment on something that's correlated with the price of CPUs, graphics cards, and electricity, and is prone to major supply shocks
  - qes 6y ago
    > if you had invested in November 2013 Cherry picking the singularly worst point. > 4 years of being in the red is a hard pill to swallow For which you would've been rewarded with nearly all of the months since 2017 with 500%+ gain, and as of now and also for quite a number of months since 2017, 1000%+ gain. > there's no reason to think this will be true for another 10 years Just one more bull run like those previous is going to put Nov '13 buyers at 10,000% gains, and if history comes close to repeating itself that will occur within 2 years. > if you're not diversified then you disregarded the single most repeated quip of investing advice in the bitcoin community - no more than you can afford to lose.

trident1000 6y ago

Also means people can save without needing to be financial wizards to not lose much of what they have over their lifetimes. Keeping what you earn in real terms over a lifetime should not be as complicated as it is today.

wmf 6y ago
Target date funds aren't complicated at all.
- trident1000 6y ago
  Many people in the US and elsewhere dont even know what that is. Know whats way easier? Holding a global non-inflatable reserve currency and forgetting the rest of the BS.
  - deleted 6y ago
    [deleted]
- BMSmnqXAE4yfe1 6y ago
  There is a lot of young people who think that stocks only ever go up. Wait until the the stock market crashes, and target date funds with it.
  - wmf 6y ago
    Target date funds aren't all stocks specifically to avoid this problem.
    - BMSmnqXAE4yfe1 6y ago
      "Target date" means the ratio of stocks to bonds in them is getting rebalanced each year - the closer the target date (retirement), more bonds and less stocks. They have 60% or more in stocks.
  - UncleMeat 6y ago

DennisP 6y ago

The fact that bitcoins can be transferred is the only reason they have value at all. You have to be able to exchange them for something else or they're worthless. The question then is whether 7 tx/sec really is sufficient to support broad global adoption, even if it's just for savings. Dollars and physical gold have no such limits. Other blockchains are vastly expanding scalability, as well as eliminating the energy usage. Another issue is whether Bitcoin can maintain its monetary policy for the long term. Here's a paper from Princeton saying that if miner rewards are dominated by transaction fees rather than block rewards, the chain destabilizes, suffering frequent long rollbacks. https://www.cs.princeton.edu/~arvindn/publications/mining_CCS.pdf https://www.cs.princeton.edu/~arvindn/publications/mining_CC... If they're right, some future generation of bitcoiners will have to choose between keeping the issuance schedule, and having a blockchain that functions reliably. There's no way for us to know which they will pick. Personally, I think the right choice is a functioning chain. That last percent or two of inflation isn't a problem for maintaining value, because economies grow at the same rate. So does the supply of gold in the economy.

slickrick216 6y ago
“ The question then is whether 7 tx/sec really is sufficient to support broad global adoption, even if it's just for savings. Dollars and physical gold have no such limits.” Yes they do, it takes even longer to move physical dollars or gold around and depending on where and who you are sending them too it might be impossible. Sure in some mainstream cases you can send the digital derivative of gold and dollars to someone but those aren’t the actual asset just a representation issued by a centralized entity or a collection of them. Visas payment network isn’t moving dollars it’s moving digital dollars. Same with gold etfs. Let’s see them try to seize bitcoin and stop transfers it’s much harder
- DennisP 6y ago
  Their latency is high but they are massively parallel. There's no practical limit on global throughput. To get low latency on dollars/gold you have to go with centralized digital representations, but Bitcoin has to do the same to get more than 7 tx/sec. I might still be a fan if that were the only option, but with other blockchains eliminating this restriction I have a hard time seeing the long-term value proposition of Bitcoin specifically.

shajznnckfke 6y ago

> Inflation is a vector NOT a real number, any asset that people care about has become generally unaffordable i.e: housing, education, healthcare. Inflation is not the cause of unaffordability in those areas, the cause is limited supply. Using bitcoin as our currency wouldn’t make more houses, more medical professionals, or less administrative bloat in universities. However, it would probably mean a complete collapse of the economy during times like these when a central bank can intervene to stabilize things.

disown 6y ago

> I never understood how "But Can I buy Starbucks with Bitcoin" became a meme That's disingenuous. It became a "meme" because for many years, bitcoin evangelists touted bitcoin as a currency replacement. You can buy pizza with bitcoins! Remember? It has and still is being sold as a virtual currency - after all you can't have cryptocurrency without currency. > I don't expect to be able to buy Starbucks with Apple stock. But you can actually buy goods with bitcoins... You fall into the same trap as all evangelists, self-contradiction. I like bitcoins, I like cryptocurrencies, think the future is bright for blockchain tech. I just don't like bullshit.

pwm 6y ago
Interestingly Satoshi wrote about the similarities between bitcoin and gold/precious metals multiple times, eg. [1], [2]. I guess it's not black and white and maybe bitcoin organically transitions from digital cash to digital gold. We'll see how it all plays out over time. [1] https://bitcointalk.org/index.php?topic=583.msg11405#msg11405 https://bitcointalk.org/index.php?topic=583.msg11405#msg1140... [2] http://p2pfoundation.ning.com/forum/topics/bitcoin-open-source?commentId=2003008%3AComment%3A9562 http://p2pfoundation.ning.com/forum/topics/bitcoin-open-sour...

hn3333 6y ago

Let's be realistic. The application for bitcoins is buying drugs in the darknet, extortion and money laundering. Not more, not less.

opportune 6y ago

The idea of bitcoin as a store of value and not a currency is a revisionist interpretation that became popular with the blockstream devs around 2017-18 when it became apparent that the bitcoin network was unsuitable for handling payments at scale and had fees too high to be useful for mundane payments.

doopy1 6y ago
Exactly! The first sentence from the original white paper is literally: "A purely peer-to-peer version of electronic cash would allow online payments to be sent directly from one party to another without going through a financial institution." Bitcoin was intended to be MONEY, instead it's pretty fucking useless for anything other than hoarding. I think it will remain an asset class, but history will not be kind to it. It's going to remain relevant and valuable as an "antique", but likely there will come a cryptocurrency that realizes the original goal at some point.
- R0b0t1 6y ago
  It is money in an important way not shared by dollars: it can't be devalued. Based on current valuation people see this as extremely desirable.
- bitreality 6y ago
  Bitcoin is the first successful project which achieved digital scarcity. Scarcity is one of the most important features in assigning value to a particular object. Bitcoin's scarcity is not only proven, but also completely transparent and trackable. Its scarcity does not rely on any centralized organization, it is completely based on mathematics and cryptography. It may not have been apparent how ground-breaking or important digital scarcity was at the time. Most of the time when we think of money, we think about how we use it in our everyday lives. We buy coffees, we pay for an Uber. But underneath all that, there is a deeper meaning to money. Why do we value money? It really just boils down to scarcity, liquidity, demand. Money has all 3. However, the scarcity factor of traditional money is flawed. It relies on centralized parties, for which money is not actually scarce. They can and do alter the supply at any time. It's a tradeoff we make because fiat is so liquid / demanded / transactable. Bitcoin is less transactable than fiat money in most regards, but it makes up for it in the transparency of its scarcity. If you were going to lock your wealth up for 25 years, would you put it in USD or BTC? More and more people would say BTC. I can tell you how many BTC will exist in the year 2050. I would have no way to do the same for any fiat currency. The main risk to BTC is some sort of technological breakthrough which greatly improves upon the concept of cryptocurrency. It's not that cryptocurrency will suddenly disappear or lose its value. Cryptocurrency is here to stay. We have witnessed the birth of a new asset class.

pjc50 6y ago

> Inflation is a vector NOT a real number, any asset that people care about has become generally unaffordable i.e: housing, education, healthcare. You came so close to realising it, but this is the real reason why Bitcoin can't deliver price stability long term - prices move relative to one another in the real economy. You can't preserve purchasing power by simply limiting money issuance, because exogenous economic shocks are real. (also, Bitcoin can't prevent the Tether people from printing Tether and buying bitcoin with it ...)

lukev 6y ago

As someone who mined a bunch of Bitcoin back in the early days, I can state that this is a completely ahistorical viewpoint. Bitcoin was _absolutely_ touted as "digital cash" early on. The earliest transactions of Bitcoins were each news items in the community and the each new vendor that accepted it as payment was put forth as proof of Bitcoin's traction. Also comparing it to Apple stock is misleading. Stock represents an ownership stake in the assets of a real-world entity. Bitcoin only has value to the extent that it is collectively agreed to have value; a trait shared with currencies (and commodities with little/no utility such as gold, cowrie shells, etc.)

rkagerer 6y ago
Instead of "little/no utility" I'd say "price completely disconnected from utility". Gold is used in lots of things, such as electronics and plating cowrie shells.

Temasik 6y ago

hodl my pokemon card

bufferoverflow 6y ago

> I never understood how "But Can I buy Starbucks with Bitcoin" became a meme Because you've never read the white paper. Which is titled "Bitcoin: A Peer-to-Peer Electronic Cash System". Unfortunately the payment aspect of bitcoin got ruined by the people who decided to lock the block size at 1MB (+segwit). Which resulted in blocks being permanently full, transaction pools clogged, and transactions fees insanely high.

appleflaxen 6y ago

that was... an incredibly well-articulated point. you just convinced me to buy some bitcoin.

ZeteticElench 6y ago

What if sha256 hash is broken? Then all bitcoin becomes worthless.