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> But did you ever wonder where the stability of USD comes from? It all comes down to how big the transaction volume of your currency is. I don't think it's th

by ardy42 6y ago

> But did you ever wonder where the stability of USD comes from? It all comes down to how big the transaction volume of your currency is. I don't think it's that simple. Transaction volume doesn't just appear from nowhere. IMHO, the stability of the US dollar mainly comes from the geopolitical & economic position of the US coupled with trust that its government won't totally mismanage it. Bitcoin has neither of those things and never will.

centimeter 6y ago
> Transaction volume doesn't just appear from nowhere. Indeed, it takes time to bootstrap a currency. That’s why it’s absurd to expect Bitcoin to be stable when it’s less than 10% the market cap of any other significant reserve asset, and may plausibly keep increasing its dominance in the reserve asset market. > Bitcoin has neither of those things and never will. I disagree - I trust much more strongly that Bitcoin will not be mismanaged than the USD, because bitcoin is governed by very simple and utile rules that are practically impossible to change, whereas the USD can be and has been inflated substantially. I don’t think your first point (the economic position of the US) is as important as you think, especially as Bitcoin comes to be the reserve asset of a larger and larger set of productive economic actors.
- ardy42 6y ago
  > I disagree - I trust much more strongly that Bitcoin will not be mismanaged than the USD, because bitcoin is governed by very simple and utile rules that are practically impossible to change, whereas the USD can be and has been inflated substantially. Following fixed, unchanging rules is kind of the opposite of being managed, let alone well-managed. > ...especially as Bitcoin comes to be the reserve asset of a larger and larger set of productive economic actors. "If" not "as": that hasn't happened yet and it's quite likely that it won't happen.
  - centimeter 6y ago
    For a monetary asset, being “managed” is a liability.
    - ardy42 6y ago
      > For a monetary asset, being “managed” is a liability. I'm not so sure of that. For instance: Bitcoin isn't money, but something that people hoard and speculate on. If it was more actively managed, its parameters could perhaps have been tweaked until it started actually acting more like money.

by ardy42 6y ago

centimeter 6y ago

> Transaction volume doesn't just appear from nowhere. Indeed, it takes time to bootstrap a currency. That’s why it’s absurd to expect Bitcoin to be stable when it’s less than 10% the market cap of any other significant reserve asset, and may plausibly keep increasing its dominance in the reserve asset market. > Bitcoin has neither of those things and never will. I disagree - I trust much more strongly that Bitcoin will not be mismanaged than the USD, because bitcoin is governed by very simple and utile rules that are practically impossible to change, whereas the USD can be and has been inflated substantially. I don’t think your first point (the economic position of the US) is as important as you think, especially as Bitcoin comes to be the reserve asset of a larger and larger set of productive economic actors.

ardy42 6y ago
> I disagree - I trust much more strongly that Bitcoin will not be mismanaged than the USD, because bitcoin is governed by very simple and utile rules that are practically impossible to change, whereas the USD can be and has been inflated substantially. Following fixed, unchanging rules is kind of the opposite of being managed, let alone well-managed. > ...especially as Bitcoin comes to be the reserve asset of a larger and larger set of productive economic actors. "If" not "as": that hasn't happened yet and it's quite likely that it won't happen.
- centimeter 6y ago
  For a monetary asset, being “managed” is a liability.
  - ardy42 6y ago
    > For a monetary asset, being “managed” is a liability. I'm not so sure of that. For instance: Bitcoin isn't money, but something that people hoard and speculate on. If it was more actively managed, its parameters could perhaps have been tweaked until it started actually acting more like money.