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Are those two concepts mutually exclusive? A liquid currency that holds value in unstable economies would seem to serve both the purpose of being spendable as

by toolz 6y ago

Are those two concepts mutually exclusive? A liquid currency that holds value in unstable economies would seem to serve both the purpose of being spendable as well as a stable investment like gold. Maybe I'm misunderstanding what it means to be "gold like" though.

lawn 6y ago
No they aren't mutually exclusive. In fact sound money should be both a good store of value and a medium of exchange (in other words work well for payments). The problem is that Bitcoin's high fees has made it unsuitable for regular payments, so proponents only have the store of value explanation left.
- __blockcipher__ 6y ago
  Exactly this. To me it was proof that 99% of the Bitcoin community (such as the Bitcoin subreddit which had an absurd amount of influence, thus why taking it over and censoring discussion was so effective) didn't care about Bitcoin as a currency and had never once used it as a currency. They just bought it on Coinbase and never even transferred to their own wallet. Meanwhile people like me who actually cared about using the damn thing, would be paying a $60 transaction fee on a $20 purchase simply because the powers that be decided that increasing the blocksize, (aka increasing the arbitrary global transaction throughput cap) was somehow antithetical to bitcoin's decentralized design.
  - Melting_Harps 6y ago
    > Meanwhile people like me who actually cared about using the damn thing, would be paying a $60 transaction fee on a $20 purchase simply because the powers that be decided that increasing the blocksize, (aka increasing the arbitrary global transaction throughput cap) was somehow antithetical to bitcoin's decentralized design. Big blocks would have never solved this issue, and you're still free to use Bcash, but you won't as no one does... because that wasn't the issue. Second layer solutions are the crux of that story, and people who didn't or wouldn't understand that were vocal non-tech people (like Roger Ver) who don't understand basic network protocol topology and why things need to run on secondary, tertiary etc... layers on Bitcoin (the Network) that uses bitcoin (the token) to validate your $20 tx on the blockchain, which by the way if you paid $60 for goes to show you never understood Bitcoin the network. No one would sacrifice that much to miners instead of just opting for fiat at that point unless there was an absolute imperative need to do so, which at $20 is clearly not the case. I should know I did it. I've been in this for a long time and the only time tx fees were above $20 was when the Bcash fork happened and Ver/Jihan spammed the network. I paid $25 tx fee on behalf of a new customer (merchant I just on-boarded) that was panicking because they didn't understand mining fee priority (I did explain it to them) and thought they lost they money, when in reality the 5 sat/byte tx cleared in a weeks time and I just recovered my funds then. I discussed it and felt absolved of responsibility but rather than lose a potential client I just begrudgingly paid the mining fee, to Antminer/Jihan no less, which added insult to injury. This is far from ideal, and I have a stuck tx as we speak (2sat/byte were clearing without a problem until then) for a over a week now, but it just goes to show that these new billionaire class investors (Saylor) don't understand this tech at all and that they need to use their new found fortune to help flesh out LN to get it to function to its full potential without all this mempool bloat they've help create. Mainchain (layer 1) is doing EXACTLY what we would think would happen under these conditions even after Segwit, its purposely this way as this is the trade off for security, which makes it less than ideal as a settlement network for small, low cost, individual transactions. That's what LN is for and I wish these instituinal investment firms would understand that, to date only Jack Dorsey (an actual technologist/developer) has funded Lightening labs, while the Winklevoss, Saylors of the World just keep trying to compete for more headline grabbing media attention and ignoring this vital issue as they do not understand or care to take the time to learn this very obvious fact. As for me, I want them to keep doing this as it gives me a better buy-in position so I'm all for it. PS: Keep downvoting, but a 2.58 tx fee cleared in less than an hour with 5+ confirmations, thus proving my point. I think we're far from the bloat we saw back then proving Segwit worked as expected and block sizes weren't a viable option nor tenable a solution to our problem, which I sincerely remains one of LN progress .
- toolz 6y ago
  I think there are tradeoffs available there since it's mostly tx count and not currency value beings moved that dictates network fees. Potentially gift cards backed by BTC solve the issue of both slow TXs and expensive TXs. I'm sure there are better solutions, but that's one that comes to mind.
- betterunix2 6y ago
  A good argument can be made that money should not be a long-term store of value, and should only store value long enough to be useful as a medium of exchange. The idea is that it is better to lend your money than to store it, and that the best way for people to "store value" is to be invested in economically productive activities.
  - lawn 6y ago
    You're right! The key point, no matter which theory you subscribe to, is that medium of exchange is the most important property.
spijdar 6y ago
I'm not sure I'd use as strong language as "mutually exclusive", but to the point: when was the last time you used gold to buy your lunch? Get groceries? Pay for an Uber? Tip someone? I'm sure someone out there insists gold is a perfectly legitimate currency for day to day life, and it's not 100% incorrect. But gold is very inconvenient to attempt to use for quick transactions. You would typically exchange gold for some other currency to do day to day spending. The same is basically true of bitcoin now as well, which was (arguably) not the original intent at all.
__blockcipher__ 6y ago
They're not mutually exclusive, and that's always been the point made by those like me who supported a blocksize increase and were on the BCH side of things. Those on the Bitcoin Core side of things believe that they are mutually exclusive, and that you can either be a gold-like store of value (that is to say, absolutely fucking useless) or a peer-to-peer electronic cash, but not both. To me it's so obvious that the value of something as a currency is what makes it equally a good store of value.

by toolz 6y ago

lawn 6y ago

No they aren't mutually exclusive. In fact sound money should be both a good store of value and a medium of exchange (in other words work well for payments). The problem is that Bitcoin's high fees has made it unsuitable for regular payments, so proponents only have the store of value explanation left.

__blockcipher__ 6y ago
Exactly this. To me it was proof that 99% of the Bitcoin community (such as the Bitcoin subreddit which had an absurd amount of influence, thus why taking it over and censoring discussion was so effective) didn't care about Bitcoin as a currency and had never once used it as a currency. They just bought it on Coinbase and never even transferred to their own wallet. Meanwhile people like me who actually cared about using the damn thing, would be paying a $60 transaction fee on a $20 purchase simply because the powers that be decided that increasing the blocksize, (aka increasing the arbitrary global transaction throughput cap) was somehow antithetical to bitcoin's decentralized design.
- Melting_Harps 6y ago
  > Meanwhile people like me who actually cared about using the damn thing, would be paying a $60 transaction fee on a $20 purchase simply because the powers that be decided that increasing the blocksize, (aka increasing the arbitrary global transaction throughput cap) was somehow antithetical to bitcoin's decentralized design. Big blocks would have never solved this issue, and you're still free to use Bcash, but you won't as no one does... because that wasn't the issue. Second layer solutions are the crux of that story, and people who didn't or wouldn't understand that were vocal non-tech people (like Roger Ver) who don't understand basic network protocol topology and why things need to run on secondary, tertiary etc... layers on Bitcoin (the Network) that uses bitcoin (the token) to validate your $20 tx on the blockchain, which by the way if you paid $60 for goes to show you never understood Bitcoin the network. No one would sacrifice that much to miners instead of just opting for fiat at that point unless there was an absolute imperative need to do so, which at $20 is clearly not the case. I should know I did it. I've been in this for a long time and the only time tx fees were above $20 was when the Bcash fork happened and Ver/Jihan spammed the network. I paid $25 tx fee on behalf of a new customer (merchant I just on-boarded) that was panicking because they didn't understand mining fee priority (I did explain it to them) and thought they lost they money, when in reality the 5 sat/byte tx cleared in a weeks time and I just recovered my funds then. I discussed it and felt absolved of responsibility but rather than lose a potential client I just begrudgingly paid the mining fee, to Antminer/Jihan no less, which added insult to injury. This is far from ideal, and I have a stuck tx as we speak (2sat/byte were clearing without a problem until then) for a over a week now, but it just goes to show that these new billionaire class investors (Saylor) don't understand this tech at all and that they need to use their new found fortune to help flesh out LN to get it to function to its full potential without all this mempool bloat they've help create. Mainchain (layer 1) is doing EXACTLY what we would think would happen under these conditions even after Segwit, its purposely this way as this is the trade off for security, which makes it less than ideal as a settlement network for small, low cost, individual transactions. That's what LN is for and I wish these instituinal investment firms would understand that, to date only Jack Dorsey (an actual technologist/developer) has funded Lightening labs, while the Winklevoss, Saylors of the World just keep trying to compete for more headline grabbing media attention and ignoring this vital issue as they do not understand or care to take the time to learn this very obvious fact. As for me, I want them to keep doing this as it gives me a better buy-in position so I'm all for it. PS: Keep downvoting, but a 2.58 tx fee cleared in less than an hour with 5+ confirmations, thus proving my point. I think we're far from the bloat we saw back then proving Segwit worked as expected and block sizes weren't a viable option nor tenable a solution to our problem, which I sincerely remains one of LN progress .
toolz 6y ago
I think there are tradeoffs available there since it's mostly tx count and not currency value beings moved that dictates network fees. Potentially gift cards backed by BTC solve the issue of both slow TXs and expensive TXs. I'm sure there are better solutions, but that's one that comes to mind.
betterunix2 6y ago
A good argument can be made that money should not be a long-term store of value, and should only store value long enough to be useful as a medium of exchange. The idea is that it is better to lend your money than to store it, and that the best way for people to "store value" is to be invested in economically productive activities.
- lawn 6y ago
  You're right! The key point, no matter which theory you subscribe to, is that medium of exchange is the most important property.

spijdar 6y ago

I'm not sure I'd use as strong language as "mutually exclusive", but to the point: when was the last time you used gold to buy your lunch? Get groceries? Pay for an Uber? Tip someone? I'm sure someone out there insists gold is a perfectly legitimate currency for day to day life, and it's not 100% incorrect. But gold is very inconvenient to attempt to use for quick transactions. You would typically exchange gold for some other currency to do day to day spending. The same is basically true of bitcoin now as well, which was (arguably) not the original intent at all.

__blockcipher__ 6y ago

They're not mutually exclusive, and that's always been the point made by those like me who supported a blocksize increase and were on the BCH side of things. Those on the Bitcoin Core side of things believe that they are mutually exclusive, and that you can either be a gold-like store of value (that is to say, absolutely fucking useless) or a peer-to-peer electronic cash, but not both. To me it's so obvious that the value of something as a currency is what makes it equally a good store of value.