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Initially it was meant to be used as currency, but it's become more of an asset class now, mainly used as a store of value, similar to gold. Do you know how di

Initially it was meant to be used as currency, but it's become more of an asset class now, mainly used as a store of value, similar to gold. Do you know how difficult it is to get millions of people to agree that something is a store of value, not only agree, but to put their money where their mouth is? THIS is why bitcoin is where it's at.

eli 6y ago
At least you can build useful things out of gold
- charcircuit 6y ago
  and you can build useful things using cryptocurrency via smart contracts.
  - MrMan 6y ago
    I think smart contracts with dollars would be just as good
    - charcircuit 6y ago
      I'm not sure what you mean. You can't program the dollar bill. It's a piece of paper. If you are asking why stable coins pegged to the dollar don't exist, well they already exist.
    - tinco 6y ago
      You can build smart contracts with dollars through the Ethereum cryptocurrency. If you think you can make smart contracts any other way then you don't really understand what smart contracts are.
  - eli 6y ago
    can you, though?
    - tootahe45 6y ago
      Reddit had a breakthrough innovation recently in the form of sh!tcoin (MOON token) built on ethereum that allows you to gift people 'moon points' or something by up-voting their comment. Still scratching my head as to why this required blockchain.
- paxys 6y ago
  You buy "useful" things out of gold only to show other people you have gold.
- sixQuarks 6y ago
  a statement like this is exactly why people still don't understand the value of Bitcoin. The usefulness of a store of value has no relation to its actual value. The value comes from the network effect of others also agreeing that it has value. What usefulness does a $100 million painting have?
  - eli 6y ago
    How is there a network effect if people aren't using Bitcoin to make or receive payments? Bitcoin is no more useful to me if my friend uses it versus a stranger. "Meme effect" is more like it -- the more hype there is, the better it is for anyone holding coins. The value comes from convincing enough new people to keep buying in. It's like a ponzi scheme in that respect. I don't think $100 million paintings are a good store of value or medium of exchange either. But again: at least many of them are nice to look at.
    - CapmCrackaWaka 6y ago
      Its utility is not in its ability to be used as a medium of exchange. Bitcoins value comes from: 1) There is no central authority that can print more 2) It is deflationary. There is a limited supply. 3) Everyone has agreed on the protocol, and everyone can be confident that their bitcoins are their own and they can trade them however they want. This is important. 4) There is no inherent value. This is the part that trips many people up. An items inherent value simply gives it a natural price minimum. For example, golds 'inherent value' is that it is an excellent conductor, and theoretically if the price gets too low then people will use it for just that, which will keep the price stable at that market value. Bitcoin doesn't have this - however this also keeps it from having no price maximum either. People want it because they want it. What is 1 BTC worth? There is nothing to tie the price to. It's worth what people will pay for it.
      - eli 6y ago
        By far the most important driver of bitcoin's value is the marketing and the incentives for every holder to pump it. If a majority of miners got together and decided to raise the bitcoin supply limit I don't think it changes the BTC/USD price. People are buying into bitcoin now because they see a graph going up and want it to keep going up. It could just as well be shares in a video game retailer.
xnx 6y ago
It happens periodically: tulips, Beanie Babies, etc.
- sixQuarks 6y ago
  True, and that's a legitimate argument - that bitcoin is simply the largest bubble in human history. But I think this argument is very unlikely, it's been over 10 years since the introduction of Bitcoin, and it's already gone through a period of euphoria and crash, only to sustain itself and break through its previous highs. Bubbles don't tend to do this, nor do they last this long.
  - mromanuk 6y ago
    Maybe Bitcoin works as a decentralized bubble, it pops somewhere and it can comeback again.
- BlueTemplar 6y ago
  Hmm, how long did the tulip mania last?
- BlueTemplar 6y ago
  Actually : better argument : how many bubbles poppings did tulips, Beanie Babies, etc. "survive" each (as a "viable" financial instrument) ? Because I've lost count for bitcoin : it's about to have it's, what 5th or 6th, bubble-popping ? (Coming back stronger each time.)

eli 6y ago

At least you can build useful things out of gold

charcircuit 6y ago
and you can build useful things using cryptocurrency via smart contracts.
- MrMan 6y ago
  I think smart contracts with dollars would be just as good
  - charcircuit 6y ago
    I'm not sure what you mean. You can't program the dollar bill. It's a piece of paper. If you are asking why stable coins pegged to the dollar don't exist, well they already exist.
  - tinco 6y ago
    You can build smart contracts with dollars through the Ethereum cryptocurrency. If you think you can make smart contracts any other way then you don't really understand what smart contracts are.
- eli 6y ago
  can you, though?
  - tootahe45 6y ago
    Reddit had a breakthrough innovation recently in the form of sh!tcoin (MOON token) built on ethereum that allows you to gift people 'moon points' or something by up-voting their comment. Still scratching my head as to why this required blockchain.
paxys 6y ago
You buy "useful" things out of gold only to show other people you have gold.
sixQuarks 6y ago
a statement like this is exactly why people still don't understand the value of Bitcoin. The usefulness of a store of value has no relation to its actual value. The value comes from the network effect of others also agreeing that it has value. What usefulness does a $100 million painting have?
- eli 6y ago
  How is there a network effect if people aren't using Bitcoin to make or receive payments? Bitcoin is no more useful to me if my friend uses it versus a stranger. "Meme effect" is more like it -- the more hype there is, the better it is for anyone holding coins. The value comes from convincing enough new people to keep buying in. It's like a ponzi scheme in that respect. I don't think $100 million paintings are a good store of value or medium of exchange either. But again: at least many of them are nice to look at.
  - CapmCrackaWaka 6y ago
    Its utility is not in its ability to be used as a medium of exchange. Bitcoins value comes from: 1) There is no central authority that can print more 2) It is deflationary. There is a limited supply. 3) Everyone has agreed on the protocol, and everyone can be confident that their bitcoins are their own and they can trade them however they want. This is important. 4) There is no inherent value. This is the part that trips many people up. An items inherent value simply gives it a natural price minimum. For example, golds 'inherent value' is that it is an excellent conductor, and theoretically if the price gets too low then people will use it for just that, which will keep the price stable at that market value. Bitcoin doesn't have this - however this also keeps it from having no price maximum either. People want it because they want it. What is 1 BTC worth? There is nothing to tie the price to. It's worth what people will pay for it.
    - eli 6y ago
      By far the most important driver of bitcoin's value is the marketing and the incentives for every holder to pump it. If a majority of miners got together and decided to raise the bitcoin supply limit I don't think it changes the BTC/USD price. People are buying into bitcoin now because they see a graph going up and want it to keep going up. It could just as well be shares in a video game retailer.

xnx 6y ago

It happens periodically: tulips, Beanie Babies, etc.

sixQuarks 6y ago
True, and that's a legitimate argument - that bitcoin is simply the largest bubble in human history. But I think this argument is very unlikely, it's been over 10 years since the introduction of Bitcoin, and it's already gone through a period of euphoria and crash, only to sustain itself and break through its previous highs. Bubbles don't tend to do this, nor do they last this long.
- mromanuk 6y ago
  Maybe Bitcoin works as a decentralized bubble, it pops somewhere and it can comeback again.
BlueTemplar 6y ago
Hmm, how long did the tulip mania last?
BlueTemplar 6y ago
Actually : better argument : how many bubbles poppings did tulips, Beanie Babies, etc. "survive" each (as a "viable" financial instrument) ? Because I've lost count for bitcoin : it's about to have it's, what 5th or 6th, bubble-popping ? (Coming back stronger each time.)