4 ms·

I mean, unless if you need to actually use that value. Then daily fluctuations matter a lot.

by ashtonkem 6y ago

ekianjo 6y ago
Who uses BTC as a spending asset on a daily basis?
- ashtonkem 6y ago
  To a first order approximation, nobody. But it was supposed to function as a currency, so if everything had worked as planned it (daily volatility) would matter on a regular basis. But even as a “store of value”, that’s an issue. Ignoring the fact that everyone values BTC in USD (or a local fiat currency of your choice), a “value” that you never access is meaningless. One day you will want to do something with it, and on that day the risk of a 20% fluctuation is a big problem you’ll have to deal with.
  - ekianjo 6y ago
    > One day you will want to do something with it, and on that day the risk of a 20% fluctuation is a big problem you’ll have to deal with. A 20% daily fluctuation is not a problem if you made 1000% on the value you stored on the past year.
    - ashtonkem 6y ago
      Yeah, it actually is. Currency isn’t supposed to appreciate. If currency does appreciate, everyone has the tendency to stop spending as much as possible because it’ll be worth more tomorrow. This causes the money supply to drop, reinforcing the deflation, and dropping the demand for labor as the real cost of wages rises, triggering more savings as consumers worry about losing their jobs. Oh, and if you have any debt denominated in BTC, it’ll bankrupt you. There’s that too. This is a classic example of there being no free lunch; you can’t have an economy based on a currency like Bitcoin deflating rapidly without there being serious side effects. The idea that currency could become 1,000% more valuable in a year without those side effects being disastrous is just laughable. Secondarily, one has to ask why is Bitcoin going up 1000% year over year. Bitcoin isn’t a stock, it can’t generate revenue. It’s a pretty awful currency at 4 transactions a second. So what’s the underlying thing that makes it worth so much in USD? Usually the answer is “something something finite”, but rarity doesn’t confer value, it sure doesn’t look like anyone is actually using it for anything other than speculation. When you get down to it, it sure looks like the value prop is “it went up a lot in value last year, maybe it’ll do it again”, which sounds extremely bubble like to me.
      - ekianjo 6y ago
        > Currency isn’t supposed to appreciate. BTC is mainly appreciating against fiat currencies whose values is being driven down the toilet by their own governments, printing billions day in day out. There's no such thing as intrinsic value, everything is relative.

I mean, unless if you need to actually use that value. Then daily fluctuations matter a lot.

ekianjo 6y ago

Who uses BTC as a spending asset on a daily basis?

ashtonkem 6y ago
To a first order approximation, nobody. But it was supposed to function as a currency, so if everything had worked as planned it (daily volatility) would matter on a regular basis. But even as a “store of value”, that’s an issue. Ignoring the fact that everyone values BTC in USD (or a local fiat currency of your choice), a “value” that you never access is meaningless. One day you will want to do something with it, and on that day the risk of a 20% fluctuation is a big problem you’ll have to deal with.
- ekianjo 6y ago
  > One day you will want to do something with it, and on that day the risk of a 20% fluctuation is a big problem you’ll have to deal with. A 20% daily fluctuation is not a problem if you made 1000% on the value you stored on the past year.
  - ashtonkem 6y ago
    Yeah, it actually is. Currency isn’t supposed to appreciate. If currency does appreciate, everyone has the tendency to stop spending as much as possible because it’ll be worth more tomorrow. This causes the money supply to drop, reinforcing the deflation, and dropping the demand for labor as the real cost of wages rises, triggering more savings as consumers worry about losing their jobs. Oh, and if you have any debt denominated in BTC, it’ll bankrupt you. There’s that too. This is a classic example of there being no free lunch; you can’t have an economy based on a currency like Bitcoin deflating rapidly without there being serious side effects. The idea that currency could become 1,000% more valuable in a year without those side effects being disastrous is just laughable. Secondarily, one has to ask why is Bitcoin going up 1000% year over year. Bitcoin isn’t a stock, it can’t generate revenue. It’s a pretty awful currency at 4 transactions a second. So what’s the underlying thing that makes it worth so much in USD? Usually the answer is “something something finite”, but rarity doesn’t confer value, it sure doesn’t look like anyone is actually using it for anything other than speculation. When you get down to it, it sure looks like the value prop is “it went up a lot in value last year, maybe it’ll do it again”, which sounds extremely bubble like to me.
    - ekianjo 6y ago
      > Currency isn’t supposed to appreciate. BTC is mainly appreciating against fiat currencies whose values is being driven down the toilet by their own governments, printing billions day in day out. There's no such thing as intrinsic value, everything is relative.