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So it sounds like lemming group think. It seems like someone one should hold “just in case,” but no real valid reason to do so yet (that I’ve heard). We know tr

So it sounds like lemming group think. It seems like someone one should hold “just in case,” but no real valid reason to do so yet (that I’ve heard). We know transactions are slow and expensive, so it’s not a good replacement for ordinary commerce. It can be used to transfer across borders, but there often is asymmetry in capital movement that makes this difficult in the places you need it most (poor countries with rapid inflation, who aren’t buying Bitcoin but rather only selling), and it’s often regulated such that it needs to be fully declared (removing the whole anti-gov part). It also lacks a lot of the controls that traditional banks have for good reasons, so fraud becomes harder to tackle, and things like refunds are just at the mercy of the other side of the transaction (making commerce even harder, as well as basic banking). So then it becomes a digital store of value, one that is only as valued as the market gives it, and typically markets eventually correct when there’s no underlying true value proposition (as we can see with $GME). It also pushes only towards deflation, so it’s terrible as a wide spread value store because it removes an important tool that governments have to handle the economy (dealt with debt via inflation aka printing money, which can be executed “well” (US) and really poorly (Zimbabwe)). What am I missing?

adhoc32 6y ago
That it is a hedge against inflation because of the network effect and vice versa.
- UncleMeat 6y ago
  Isn’t everything other than cash a hedge against inflation?
  - anm89 6y ago
    Yes but not equally.
  - adhoc32 6y ago
    no, a car for example devaluates over time.
    - PragmaticPulp 6y ago
      Driving a car devalues it, because you're using up the utility and extracting value from it. If you buy a car and treat it like an investment (don't drive it, store it properly, keep it maintained) it behaves like an investment. Depending on the car and the market, the value goes up substantially. Here's an example of a 2000 Honda Civic selling for $50,000 USD : https://bringatrailer.com/listing/2000-honda-civic-27/ https://bringatrailer.com/listing/2000-honda-civic-27/ Bitcoiners like to emphasize Bitcoin's limited supply, but Bitcoin is hardly the only thing in life with a limited supply. There will never be any more 2000 Honda Civics, for example.
      - adhoc32 6y ago
        Sure, but it costs money to store it and maintain it in a good shape. Also try sending the equivalent value of 100$ using a Honda Civic. Barter economy is impractical.
      - choward 6y ago
        This seems like an example of survivorship bias. That Honda is an outlier. Not every car will go up that much if at all. Hondas are known for reliability but it takes time to know if a car model is reliable and not a lemon. The purchase price of that car would have been $27,320.28 in today's dollars. Also, you still have to store it and do some minor maintenance even though it's not being used. The true cost of ownership for 21 years isn't really known. It's hard to know how much the real profit actually was. Either way, it's a gamble as an investment strategy.
    - UncleMeat 6y ago
      Ok. Every investment. Bonds, real estate, stocks, metals. Magic cards probably don't count. The point is that "use BTC as a hedge against inflation" is obviously not a thing since people are chasing 10x growth.
      - conradev 6y ago
        Maybe many under-informed retail investors are chasing 10x growth, sure, but it feels like the larger institutions mentioned here are doing it likely the same reason they invest in any other asset: diversification.
- incrudible 6y ago
  Why would you hedge against something like inflation, which is relatively constant over a year, by putting your money into a highly speculative risk asset with absolutely insane volatility over that same timeframe? Like many arguments for Bitcoin, this one just doesn't make sense.
  - disruptalot 6y ago
    "Relatively constant over a year" seems very loose don't you think? In the past year we've seen an unprecedented injection of money into the system. Presuming you're living in the U.S. have a look south of the border to find out how every national currency is always a few economic policies from throwing inflation targets out of the window.
    - incrudible 6y ago
      Even countries that do have hyperinflation experience it at a somewhat predictable pace. With Bitcoin, you don't know if it's down 80% tomorrow, then up 200% the next day, then down 50% the day after. It's a huge tail risk.
      - base698 6y ago
        In the Weimar republic eggs went from $0.5 to $500 pretty quickly and by 8 months eggs were $1,500,000. Happens quicker than you think and that's a hell of a tail risk. Bitcoin has been pretty consistently up on any timeline over the last decade. I've been present every crash and my tolerance for keeping a small percentage of net worth in it increases each time. You don't have to keep 100% of your cash in bitcoin. With the current pace of money printing I think not keeping something in it is basically negligence to your family.
        bluecalm 6y ago
        This happened because there wasn't enough eggs or food in general. If there is food shortage in the future people will pay all the bitcoins they have to get a loaf of bread or a few eggs.
walshemj 6y ago
Sounds like pets.com all over again and I am glad I just started diversifying into gold.
- choward 6y ago
  Pets.com was a business that could actually grow so it could still be considered an investment. Bitcoin is purely based on speculation. Gold is pretty much the same thing except it has some intrinsic value. The value of gold and bitcoin only moves because of peoples' feelings.
coinward 6y ago
The valid reason is that Bitcoin is the best money that has ever emerged in human history. The denationalization of money is inevitable and long predicted. Check out Nobel prize winning economist Hayek's Denationalization of Money https://en.wikipedia.org/wiki/The_Denationalization_of_Money https://en.wikipedia.org/wiki/The_Denationalization_of_Money
- ben_w 6y ago
  From your link: “Stability in value is presumed to be the decisive factor for acceptance. Hayek makes the assumption that competition will favor currencies with the greatest stability in value since a devalued currency hurts creditors, and an upward-revalued currency hurts debtors.” Stability is not the observed behaviour in BTC.
  - coinward 6y ago
    if you use BTC as unit of account then Bitcoin is the only thing that IS stable!
    - Jtsummers 6y ago
      /s? That's a nonsensical statement. Use BTC to buy a car today, and then use it to buy the same value car in a year. BTC is, fundamentally, unstable at this point in time. Even when all BTC is mined and it is distributed across the globe to every human being and sentient AI and animal, it will likely continue to be highly unstable as a currency. Compare to the, relatively, stable USD as a currency. Prices for goods and services in USD fluctuate, but typically only changing once a year or so. Your milk price doesn't, in USD, shoot up by 500% in a week.
      - coinward 6y ago
        things should be getting cheaper with innovation and technology growth
        6y ago
mandelbrotwurst 6y ago
> it’s terrible as a wide spread value store because it removes an important tool that governments have to handle the economy (dealt with debt via inflation aka printing money How does a static rather than unconstrained supply make something a LESS good store of value?
- DavidSJ 6y ago
  It might be a good store of value (aside from its extreme volatility), but the GP comment would be correct if you substitute "medium of exchange" for "store of value".
  - trident5000 6y ago
    Gold is short term volatile as well. Long term average is all that matters to be an effective value store. Its like a more volatile gold right now through price discovery.
    - ori_b 6y ago
      Gold is also a poor place to put your money. The long term average is both volatile and underperforms most indexes. https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart https://www.macrotrends.net/1333/historical-gold-prices-100-...
      - trident5000 6y ago
        Gold is not in price discovery because its been around for so long and already had its ETF moment (which is why its stagnated since that massive run). But gold has always performed cyclically. Long term (very long term) its done quite well. Not my cup of tea but it had its place. Going forward I expect btc will disrupt it and flip its value (JPM making the same call).
        ori_b 6y ago
        Over the last 100 years, you'd have done significantly better by putting your money into an index fund -- and had less volatility. As far as I can tell, gold is just a lousy place to keep your money. What kind of long term are you talking about?
PragmaticPulp 6y ago
The forefront of the Bitcoin frenzy isn't even on the blockchain, it's at the exchanges. Hardcore tech people and those who don't (or can't) trust institutions with their Bitcoin will pay the transaction fees to get their money out of exchanges and into their own wallet. The average retail investor, however, doesn't want to be their own bank. They just want in on the price action, while letting the exchange manage their money. Does anyone really think the person buying crypto $100 at a time in their Robinhood account wants to pay $18 (current average transaction fee) every time they want to move that BTC into their wallet? Of course not, which is one reason why Robinhood doesn't even have an option to withdraw Bitcoin. As with any frenzy, the misinformation being circulated by people who want everyone to buy Bitcoin is getting out of control. How many average people buy Bitcoin because they think Bitcoin is the only way to avoid losing purchasing power? Meanwhile, everyone else has been protecting against inflation by purchasing stocks, real estate, or virtually any other investment long before Bitcoin was even invented. (Yes, I'm aware of the 21 million maximum BTC cap). The current Bitcoin narratives are more like a religion than reality. That said, Tesla's Bitcoin purchase does make a lot of sense. Elon Musk went on Twitter and called Bitcoin "BS" to drive the price down so they could buy at a discount. They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. They used Elon's influence to make a quick profit on the frenzy.
- dheera 6y ago
  > Elon Musk went on Twitter and called Bitcoin "BS" to drive the price down so they could buy at a discount. They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. They used Elon's influence to make a quick profit on the frenzy. I don't see an inherent problem with this. People who were too gullible to believe influencer crap and caused bitcoin's price to go down by panic selling are now gone from the market, and the believers stayed in and made money. That's a good thing, and weeds out gullible people from the system. This isn't the stock market where fundamentals matter.
  - n4r9 6y ago
    Did people really disappear from the market, or did they temporarily refuse to buy above a certain price?
fwiwm2c 6y ago
By the time you understand Bitcoin/crypto, it will be too late for you to make profit from it. Get in now - lot more smarter people are in there and doing wonders for themselves. Look at your friends. Look at colleagues in your company. A lot of them are in. And here you are trying to make sense of it from your perspective. Even Ray Dalio is opening up and fair to say he knows a lot more things about finance and economics than you. Just get in.
- gibbonsrcool 6y ago
  Is this sarcasm? Honestly can't tell.
  - choward 6y ago
    It's either sarcasm or they have money in bitcoin and need people to buy into it so the price goes up. I can't tell either.
    - fwiwm2c 6y ago
      I have been in Bitcoin since 2016 and have enjoyed my riches. The next wave of new users will come from institutions. Hacker News audience is not what will pump the price further.
      - choward 6y ago
        It sound like we're in agreement that it's a pump and dump scheme and not a true investment.
        fwiwm2c 6y ago
        As they say - have fun staying poor. Think about it - if you had invested at any point in Bitcoin before today, you would have made money. But keep on resisting.
        6y ago
MarkPNeyer 6y ago
> but no real valid reason to do so yet (that I’ve heard). I hold because i expect us to continue approaching the game-theoretic attractor. I've held for years and will keep holding. Every year, i see more and more people coming around to my perspective. How many years can you watch the price keep going up before you'll eventually consider that you might be missing something? > We know transactions are slow and expensive, lightning network obviates this problem > it’s often regulated such that it needs to be fully declared (removing the whole anti-gov part) The government still can't print more bitcoin, which is the main appeal for me. They also cant technically block anyone from recieving coins. They can make doing so a crime, but don't have the technical ability to, say, freeze funds. > typically markets eventually correct when there’s no underlying true value proposition Given that bitcoin is over 10 years old, shouldn't its longevity be taken as evidence that there is, indeed, a true value proposition? > which can be executed “well” Why is 'well' in quotes here? Are you open to the hypothesis that money printing exacerbates might cause long term issues in society?
- xwolfi 6y ago
  How many years can I watch you scam people with get rich quick arguments "invest now, it can only go up"? Forever. Make your money the way you want, but I wont participate in something I have no chance to control.
  - tuesdayrain 6y ago
    >Make your money the way you want, but I wont participate in something I have no chance to control. Sounds like you should avoid effectively any form of investing according to this principle.
- SomewhatLikely 6y ago
  > They can make doing so a crime, but don't have the technical ability to, say, freeze funds. If the governments of the world made it a crime for miners to include transactions involving certain blacklisted addresses in their blocks that could be a big step towards a freeze.
bhupy 6y ago
I'm also still wrapping my head around this just like you, but I think I understand enough to answer some of your questions. > We know transactions are slow and expensive, so it’s not a good replacement for ordinary commerce. I don't think that this is obviously true. Digital transfer of the US Dollar is similarly slow and expensive (see: ACH, Wire, SWIFT). The response you'll hear the most frequently is that BTC (and digital currencies) should be compared to the US Dollar, not to Visa and Stripe and Venmo etc. Right now, if you want to send US dollars to somebody and you're unable to do it through PayPal/Venmo/Square/Visa/MasterCard, your best bet is to literally mail cash to the recipient. BTC solves that problem; you now have the option to send someone "cash" in a trust-less way, but that's probably not how the majority of people would use BTC. The blockchain doesn't have to be used to settle every single transaction in real-time, just like you don't have to use ACH/Wire to send $5 to someone electronically for every transaction. Just like banks today send a batched ACH files of all money movement at the end of the day, they may do the same on the blockchain hourly/daily. The benefit of BTC over USD is that there is a way to "mail someone a briefcase of cash" without having to actually mail them; instead you can "mail" it to them on the blockchain and have it take a few hours rather than 3-5 business days. If you want to send US dollars faster, you can rely on centralized institutions that build financial products on top of the US Dollar, but the same can happen on top of other non-government-backed currencies. Just like you have a bank account where you can see in Dollars or Yen or Pounds what your bank balance is, one ought to be able to open an account and see what their balance is in BTC or ETH or Nano...or so the argument goes. > It also lacks a lot of the controls that traditional banks have for good reasons, so fraud becomes harder to tackle, and things like refunds are just at the mercy of the other side of the transaction (making commerce even harder, as well as basic banking) Again, you want to compare BTC/ETH to the actual currencies, rather than the institutions that engage with those currencies. All of what you said is true of any fiat currency: I can physically hand you a $20 bill, and that transaction can happen in a totally un-traceable way already. There’s a common saying that if cash were invented today, it would be illegal, since it’s hard for the government to track and they wouldn’t like it. > So then it becomes a digital store of value, one that is only as valued as the market gives it, and typically markets eventually correct when there’s no underlying true value proposition (as we can see with $GME). This is a good point, but I found a good "counter-point" in Matt Levine's latest Bloomberg Money blog post: https://www.bloomberg.com/opinion/articles/2021-02-16/goldman-adds-robo-adviser-to-marcus-consumer-brand https://www.bloomberg.com/opinion/articles/2021-02-16/goldma... Here is the relevant bit: "We have talked a lot recently about the Reddit-fueled rally in meme stocks like GameStop Corp. One thing I have said about this rally is that it reflected Reddit traders’ correct understanding of a simple market dynamic, which is that if they all bought the same stock at once then it would go up. So they did. Institutional Bitcoin adoption, as we have also discussed, has a somewhat similar dynamic: Each time a big institution says “we like Bitcoin now,” Bitcoin goes up, because widespread mainstream institutional adoption is clearly bullish for Bitcoin at this point. So if you are a big institution or corporation, you can make some free money by (1) buying Bitcoin, (2) announcing “we like Bitcoin now,” (3) watching Bitcoin go up, and (4) selling the Bitcoins you bought for a quick profit. (Or keep them as a bet that other institutions will do the same thing and you’ll make even more profits.) This dynamic, separate from any particular institutional decision, is good for Bitcoin: If it’s in every big bank’s and corporation’s short-term financial interest to quietly buy some Bitcoins and then noisily make a show of adopting Bitcoin, then a lot of them will, which will have the effect of pushing up the price (both because of their buying and because of their announcements). Unlike meme stocks, there is no underlying business, no cash flows that do or don’t make the price make sense: The price of Bitcoin makes sense or not purely as a social fact; if there are “fundamentals,” they are things like “widespread mainstream adoption,” which you can provide. “The fundamentals of Bitcoin are strong, look, Morgan Stanley is buying some,” Morgan Stanley could plausibly say, after buying some Bitcoins. So it might as well do that. With the meme stocks the natural thing was to worry about the endgame for that process; you can’t have a stock price that is divorced from fundamental value forever. With Bitcoin, you ... can? Like if the endgame for Bitcoin was “universal adoption by corporations and institutions as a digital store of value,” then that sounds like a good and permanent and somehow fundamental result?" > so it’s terrible as a wide spread value store because it removes an important tool that governments have to handle the economy (dealt with debt via inflation aka printing money, which can be executed “well” (US) and really poorly (Zimbabwe)). This is very debatable, and you've more or less illustrated the controversy by pointing to a "good" version and a "bad" version. The political question is whether the possibility of "bad" means that the concept of government-controlled inflationary assets is inherently bad. I won't pretend that there's an objective answer, but neither should you; the fact that it removes the tool you describe can both be described as a feature or a bug, depending on your political leaning.
guiomie 6y ago
When I read a message like this, I conclude that bitcoin has another 10x to go since gold has a 10 trillion market cap. (Preemptively I'm going to say that gold market cap has almost nothing to do with its usage as a commodity, google it) reply
- the_gastropod 6y ago
  And the GDP of New Zealand will go up 100x because the USA has a $21T GDP. (Preemtively I’m going to say that US’s market cap has almost nothing to do with its sheep population, google it.)
- graeme 6y ago
  This seems to be flat out false. According to this 78% of gold globally is used in jewelry. Some other portion is used in electronics of industry. https://goldprice.com/project/facts-about-gold/ https://goldprice.com/project/facts-about-gold/ There’s no such reserve value for Bitcoin. You can’t look at it or hold it or do anything with it other than as a currency. I’ve seen widely varying stats estimating gold’s jewelry share but all of them are large.
  - efwfwef 6y ago
    That's a moot point, Gold actual usage has no relation with its usage as a store of value. It's used as a store of value because it's shiny and people associates it with "value". Think: why are diamonds so expensive?
    - graeme 6y ago
      Maybe I don’t follow you but if more than half of gold use is jewelry then it seems the use has a lot to do with it’s value. People trade gold on top of that but it’s linked to use. If jewelry demand dropped 98% it would surely affect the price of gold.
      - efwfwef 6y ago
        > half of gold use is jewelry uh, no that's not true. I bet there's more bitcoin being used to buy drugs than gold being used in jewelry
whywhywhywhy 6y ago
>So it sounds like lemming group think. It seems like someone one should hold “just in case,” but no real valid reason to do so yet (that I’ve heard). Honestly what more do most people have? You could work your entire life but even all the earnings and scrimping and saving isn't even be a tiny fraction to what you would have if you had been the one to fulfil the order for the bitcoin pizza and just held. Think a lot of people misunderstand just how hopeless the world is for most people. GME and Doge are just the start, get used to hearing people are sinking their entire savings into far flung gambles multiple times a year from here on out. Especially in a post pandemic world where people are been completely downtrodden to their limit. Property is so exorbitant, pay is so low we're now entering a world where just gambling seems the smarter option than living within your means because anyone who has tried that can tell you it gets you nowhere. Pay just hasn't increased enough in line with property and your dollars are worth less and less every day.
- FFRefresh 6y ago
  I personally think that the huge increase in the money supply and all of the stimulus money that has went out to people is the primary fuel to speculative investing (like GME and Crypto). Savings rates in the pandemic have never been higher. I see it less as desperation and more of 'whoa, i have more money now, i want to put it into things that go up in value!'. I haven't seen the data (so do correct me), but I would suspect that less sophisticated retail investing is on the rise over the last year, correlating with increased savings.
- tootie 6y ago
  We used to call them Ponzi schemes. This is the same but in slow motion. People are going to start taking their profits at some point and whoever takes them last will be holding the bag.
  - rlt 6y ago
    Or just lottery tickets, which are mostly purchased by low income folks, and legal/state-sponsored, no less.
  - 6y ago
AmericanChopper 6y ago
When "the market" does something that somebody considers to be irrational, the explanation is almost certainly that they either simply don't understand it, or that they do understand it and they're just being judgemental about the motives at play. The reason it has value is because people have demand for it. People have demand for it for a variety of reasons. I think it's reasonable to presume that a non-trivial portion of that demand is driven by the features that make it a rather good black market currency. It's also obviously quite appealing to certain groups of privacy conscious individuals. I've heard it's somewhat popular for international remittances, which makes sense given the economic stability issues various places have around the world. On top of those fundamentals, demand is further inflated by speculators. Your biggest criticism seems to be that it would be a bad national currency because you can't implement a bitcoin monetary policy. But none of the demand for bitcoin is driven by that factor, so the observation is simply irrelevant.
- AshWolfy 6y ago
  Or maybe just markets are stupid and bitcoin is mostly driven by hype based speculators
  - AmericanChopper 6y ago
    I think this would be covered by the "judgemental dismissal of market rationale" explanation I was talking about.
    - AshWolfy 6y ago
      Because they self evidently are, markets are so self evidently irrational the concept of "animal spirits" is one of the first thing we learned in econ 101, almost every post about the stock market will have someone saying the market can stay irrational longer than you can stay solvent unless you want to explain how what happened with gme reflected a rational valuation of the company
      - AmericanChopper 6y ago
tippytippytango 6y ago
Do you really want an answer to that question? Feels more like your are taking the temperature of the top minds of HN to decide if it's cool to like bitcoin yet.
- graeme 6y ago
  HN loved bitcoin circa 2011 and in the few years after that. Wish I’d paid attention. As you have made a totally new account you probably weren’t around for this.
  - selestify 6y ago
    When did the shift happen and why?
spoonjim 6y ago
Criminal and black market transactions are a sizable fraction of the economy and bitcoin is a major financial innovation for this “sector.” The only problem is the price volatility, you don’t want to collect some money for Fat Tony and have it drop in value by 20% by the time you get it to him.
6nf 6y ago
Every minute, there are thousands of bitcoin transactions happening at dozens of exchanges, and it's happening instantly with very low cost. Because it's off-chain. That's what you're missing here, not everything needs to be on-chain to be valuable. Exchanges and businesses and services can aggregate.
- dragontamer 6y ago
  But if it's off chain, why use Bitcoin at all? If you never actually use the blockchain, then you don't really know if those BTC you 'bought' even exist.
  - bitexploder 6y ago
    It’s still backed by the currency. Kind of like how when you make a stock trade the actual trade isn’t cleared for some time. In this way the blockchain of Bitcoin is simply transparent and easy to follow, if slow and expensive.
    - dragontamer 6y ago
      A big criticism of the current market is that Tethers aren't backed by anything. Nonetheless, there's a huge BTC and USDT and USD trade going on.
  - efwfwef 6y ago
    The same reason why when you use Venmo you don't think "wait, why use USD at all if it's all a database?" The truth is, the current financial system is just a large number of databases trying to sync with one another, and one of cryptocurrencies' goal is to decrease this amount of databases.
    - dragontamer 6y ago
      > and one of cryptocurrencies' goal is to decrease this amount of databases. And replace them with one of the biggest wastes of electricity? What's the point of "getting rid of databases", when you end up needing them for something as fundamental as an BTC/USD exchange anyway?
bobbygoodlatte 6y ago
I know you don't control who upvotes your comment, but I find it funny this is the top rated comment. It has become a total HN cliché that the top comment is a negative takedown of the tech or startup in question. From Dropbox, to Coinbase, to Ethereum, and now to Bitcoin at 50k. Not refuting anything you're saying here. Just find it amusing to have seen this pattern play out so many times here on HN.
- vmception 6y ago
  entrepreneur works in blockchain sector and makes millions with no VCs: exists engineer working at morally dubious ad-retargeting analytics company: "this has no utility whatsoever ($30), I could do that with a database ($7,500)! I'm going to ignore this for entire decades! ($50,000)"
- lm28469 6y ago
  Isn't it pure survivorship bias ? The dropbox thing keeps on being mentioned but for 1 wrong comment about dropbox there are thousands negative valid comments about stupid and failed startups/ideas.
didibus 6y ago
Its got momentum as a crypto, in theory it could update itself to whatever would start being more valuable if needed. Also, I don't know if all investment need to make sense based on economic fundamentals, bitcoin makes sense at a psychological level why it is a good investment for now, as more and more people slowly decide they need to dip their toes in it as well.
bean5e 6y ago
lemming group think? do you have this concept of all crypto proponents as stupid lemmings all following each other not capable of independent, rational thought? i call a bunch of people serving 1% of the population without question lemmings. to try and falsely frame a legitimate worldwide, grassroots counterculture movement as just a bunch of stupid lemmings betrays your prejudice and makes it hardly surprising that you don't see any value in the space. i can't believe a bunch of "hackers" shit on the open source, decentralized internet of money. it's a currency created by real hackers for the internet. it is the first of an entirely new asset class that allows any person to be their own bank and has a hard cap on supply. Yes it's slow, but it's also extremely secure and resistant to change. >it’s often regulated such that it needs to be fully declared (removing the whole anti-gov part)... so fraud becomes harder to tackle which one is it? cash is the king of fraud and illegal activities anyway: fungible, anonymous, hard to trace. a public immutable database ought to make fraud much easier to weed out in the long run... >no underlying true value proposition it has outperformed every other asset in the world over the last decade, maybe you need to look a little closer to understand the value proposition. just because a bunch of bigots decide it has no value proposition doesn't make it true and obviously the market strongly disagrees with this sentiment. >It also pushes only towards deflation you mean poor people can have their money appreciate over time instead of having their meager savings robbed by an unseen, man-made market force? you mean people won't be so eager to waste their money on crap that causes pollution and ends up as landfill? i've never really understood the deflation argument, it's a textbook slippery slope. > removes an important tool that governments have to handle the economy if the government were truly democratic and benevolent this would be the case. unfortunately we live under a bunch of warmongering kleptocrats who need to be kept in check. more like an important tool to bail out themselves and their cronies after they fuck up the economy so badly with their corrupt, short-sighted practices. the people who seem to screech the loudest against cryptos seem to have a massive vested interest in maintaining the status quo. you really can't get how the economy might actually function better for most people if it wasn't serving as a welfare state for the elite? meanwhile the btc supercomputer keeps producing blocks, just like it has since day one.
efwfwef 6y ago
> So then it becomes a digital store of value, one that is only as valued as the market gives it, and typically markets eventually correct when there’s no underlying true value proposition (as we can see with $GME). You're not missing anything, you said it yourself it's a store of value. Maybe markets eventually correct, but in the last 10 years Bitcoin has only gone up, so if you had planned to use it to store value for 10 years a decode ago, then it worked pretty well. > It also pushes only towards deflation, so it’s terrible as a wide spread value store because it removes an important tool that governments have to handle the economy Well it's a store of value, not a tool for the gov to handle the economy.
- Thorrez 6y ago
  >in the last 10 years Bitcoin has only gone up It was $19k in Dec 2017 and $3k in Dec 2018.
  - efwfwef 6y ago
    if you haven't sold*
    - Thorrez 6y ago
      It really depends on your definition of "only".
dogman144 6y ago
> What am I missing? > We know transactions are slow and expensive ^ You're missing this. * Cross-border transactions which would take days for Swift are instant * Expensive: no not really. In the filled mempool days, yes prices shot up, but that was a few years ago. Fees are incredibly low now. * Non-int transactions are still just about the same speed as a Visa cc/debit swipe. Again, when the mempool is going insane (hasn't happened in some time), yes TXs could take time vs. fees. However, nowadays it's just about as quick to reach a "basically verified" TX as it whatever risk mgmt balancing Visa is doing in the background. This time, instead of Visa's fraud department doing some checks, it's 1 or 2 blocks to very likely confirmed, 6 blocks to definite. Just different ways of skinning the same cat. You're correct on this > also lacks a lot of the controls that traditional banks have for good reasons, But you're blending some arguments that are counterfactual if taken together as something cohesive. It's fast because it doesn't have these controls, for instance.
moralsupply 6y ago
> What am I missing? You should short Bitcoin and make a lot of money

adhoc32 6y ago

That it is a hedge against inflation because of the network effect and vice versa.

UncleMeat 6y ago
Isn’t everything other than cash a hedge against inflation?
- anm89 6y ago
  Yes but not equally.
- adhoc32 6y ago
  no, a car for example devaluates over time.
  - PragmaticPulp 6y ago
    Driving a car devalues it, because you're using up the utility and extracting value from it. If you buy a car and treat it like an investment (don't drive it, store it properly, keep it maintained) it behaves like an investment. Depending on the car and the market, the value goes up substantially. Here's an example of a 2000 Honda Civic selling for $50,000 USD : https://bringatrailer.com/listing/2000-honda-civic-27/ https://bringatrailer.com/listing/2000-honda-civic-27/ Bitcoiners like to emphasize Bitcoin's limited supply, but Bitcoin is hardly the only thing in life with a limited supply. There will never be any more 2000 Honda Civics, for example.
    - adhoc32 6y ago
      Sure, but it costs money to store it and maintain it in a good shape. Also try sending the equivalent value of 100$ using a Honda Civic. Barter economy is impractical.
    - choward 6y ago
      This seems like an example of survivorship bias. That Honda is an outlier. Not every car will go up that much if at all. Hondas are known for reliability but it takes time to know if a car model is reliable and not a lemon. The purchase price of that car would have been $27,320.28 in today's dollars. Also, you still have to store it and do some minor maintenance even though it's not being used. The true cost of ownership for 21 years isn't really known. It's hard to know how much the real profit actually was. Either way, it's a gamble as an investment strategy.
  - UncleMeat 6y ago
    Ok. Every investment. Bonds, real estate, stocks, metals. Magic cards probably don't count. The point is that "use BTC as a hedge against inflation" is obviously not a thing since people are chasing 10x growth.
    - conradev 6y ago
      Maybe many under-informed retail investors are chasing 10x growth, sure, but it feels like the larger institutions mentioned here are doing it likely the same reason they invest in any other asset: diversification.
incrudible 6y ago
Why would you hedge against something like inflation, which is relatively constant over a year, by putting your money into a highly speculative risk asset with absolutely insane volatility over that same timeframe? Like many arguments for Bitcoin, this one just doesn't make sense.
- disruptalot 6y ago
  "Relatively constant over a year" seems very loose don't you think? In the past year we've seen an unprecedented injection of money into the system. Presuming you're living in the U.S. have a look south of the border to find out how every national currency is always a few economic policies from throwing inflation targets out of the window.
  - incrudible 6y ago
    Even countries that do have hyperinflation experience it at a somewhat predictable pace. With Bitcoin, you don't know if it's down 80% tomorrow, then up 200% the next day, then down 50% the day after. It's a huge tail risk.
    - base698 6y ago
      In the Weimar republic eggs went from $0.5 to $500 pretty quickly and by 8 months eggs were $1,500,000. Happens quicker than you think and that's a hell of a tail risk. Bitcoin has been pretty consistently up on any timeline over the last decade. I've been present every crash and my tolerance for keeping a small percentage of net worth in it increases each time. You don't have to keep 100% of your cash in bitcoin. With the current pace of money printing I think not keeping something in it is basically negligence to your family.
      - bluecalm 6y ago
        This happened because there wasn't enough eggs or food in general. If there is food shortage in the future people will pay all the bitcoins they have to get a loaf of bread or a few eggs.

walshemj 6y ago

Sounds like pets.com all over again and I am glad I just started diversifying into gold.

choward 6y ago
Pets.com was a business that could actually grow so it could still be considered an investment. Bitcoin is purely based on speculation. Gold is pretty much the same thing except it has some intrinsic value. The value of gold and bitcoin only moves because of peoples' feelings.

coinward 6y ago

The valid reason is that Bitcoin is the best money that has ever emerged in human history. The denationalization of money is inevitable and long predicted. Check out Nobel prize winning economist Hayek's Denationalization of Money https://en.wikipedia.org/wiki/The_Denationalization_of_Money https://en.wikipedia.org/wiki/The_Denationalization_of_Money

ben_w 6y ago
From your link: “Stability in value is presumed to be the decisive factor for acceptance. Hayek makes the assumption that competition will favor currencies with the greatest stability in value since a devalued currency hurts creditors, and an upward-revalued currency hurts debtors.” Stability is not the observed behaviour in BTC.
- coinward 6y ago
  if you use BTC as unit of account then Bitcoin is the only thing that IS stable!
  - Jtsummers 6y ago
    /s? That's a nonsensical statement. Use BTC to buy a car today, and then use it to buy the same value car in a year. BTC is, fundamentally, unstable at this point in time. Even when all BTC is mined and it is distributed across the globe to every human being and sentient AI and animal, it will likely continue to be highly unstable as a currency. Compare to the, relatively, stable USD as a currency. Prices for goods and services in USD fluctuate, but typically only changing once a year or so. Your milk price doesn't, in USD, shoot up by 500% in a week.
    - coinward 6y ago
      things should be getting cheaper with innovation and technology growth
      - 6y ago

mandelbrotwurst 6y ago

> it’s terrible as a wide spread value store because it removes an important tool that governments have to handle the economy (dealt with debt via inflation aka printing money How does a static rather than unconstrained supply make something a LESS good store of value?

DavidSJ 6y ago
It might be a good store of value (aside from its extreme volatility), but the GP comment would be correct if you substitute "medium of exchange" for "store of value".
- trident5000 6y ago
  Gold is short term volatile as well. Long term average is all that matters to be an effective value store. Its like a more volatile gold right now through price discovery.
  - ori_b 6y ago
    Gold is also a poor place to put your money. The long term average is both volatile and underperforms most indexes. https://www.macrotrends.net/1333/historical-gold-prices-100-year-chart https://www.macrotrends.net/1333/historical-gold-prices-100-...
    - trident5000 6y ago
      Gold is not in price discovery because its been around for so long and already had its ETF moment (which is why its stagnated since that massive run). But gold has always performed cyclically. Long term (very long term) its done quite well. Not my cup of tea but it had its place. Going forward I expect btc will disrupt it and flip its value (JPM making the same call).
      - ori_b 6y ago
        Over the last 100 years, you'd have done significantly better by putting your money into an index fund -- and had less volatility. As far as I can tell, gold is just a lousy place to keep your money. What kind of long term are you talking about?

PragmaticPulp 6y ago

The forefront of the Bitcoin frenzy isn't even on the blockchain, it's at the exchanges. Hardcore tech people and those who don't (or can't) trust institutions with their Bitcoin will pay the transaction fees to get their money out of exchanges and into their own wallet. The average retail investor, however, doesn't want to be their own bank. They just want in on the price action, while letting the exchange manage their money. Does anyone really think the person buying crypto $100 at a time in their Robinhood account wants to pay $18 (current average transaction fee) every time they want to move that BTC into their wallet? Of course not, which is one reason why Robinhood doesn't even have an option to withdraw Bitcoin. As with any frenzy, the misinformation being circulated by people who want everyone to buy Bitcoin is getting out of control. How many average people buy Bitcoin because they think Bitcoin is the only way to avoid losing purchasing power? Meanwhile, everyone else has been protecting against inflation by purchasing stocks, real estate, or virtually any other investment long before Bitcoin was even invented. (Yes, I'm aware of the 21 million maximum BTC cap). The current Bitcoin narratives are more like a religion than reality. That said, Tesla's Bitcoin purchase does make a lot of sense. Elon Musk went on Twitter and called Bitcoin "BS" to drive the price down so they could buy at a discount. They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. They used Elon's influence to make a quick profit on the frenzy.

dheera 6y ago
> Elon Musk went on Twitter and called Bitcoin "BS" to drive the price down so they could buy at a discount. They then announced their Bitcoin purchase with fanfare that drove the price up, marking a quick return on their investment. They used Elon's influence to make a quick profit on the frenzy. I don't see an inherent problem with this. People who were too gullible to believe influencer crap and caused bitcoin's price to go down by panic selling are now gone from the market, and the believers stayed in and made money. That's a good thing, and weeds out gullible people from the system. This isn't the stock market where fundamentals matter.
- n4r9 6y ago
  Did people really disappear from the market, or did they temporarily refuse to buy above a certain price?

fwiwm2c 6y ago

By the time you understand Bitcoin/crypto, it will be too late for you to make profit from it. Get in now - lot more smarter people are in there and doing wonders for themselves. Look at your friends. Look at colleagues in your company. A lot of them are in. And here you are trying to make sense of it from your perspective. Even Ray Dalio is opening up and fair to say he knows a lot more things about finance and economics than you. Just get in.

gibbonsrcool 6y ago
Is this sarcasm? Honestly can't tell.
- choward 6y ago
  It's either sarcasm or they have money in bitcoin and need people to buy into it so the price goes up. I can't tell either.
  - fwiwm2c 6y ago
    I have been in Bitcoin since 2016 and have enjoyed my riches. The next wave of new users will come from institutions. Hacker News audience is not what will pump the price further.
    - choward 6y ago
      It sound like we're in agreement that it's a pump and dump scheme and not a true investment.
      - fwiwm2c 6y ago
        As they say - have fun staying poor. Think about it - if you had invested at any point in Bitcoin before today, you would have made money. But keep on resisting.
        6y ago

MarkPNeyer 6y ago

> but no real valid reason to do so yet (that I’ve heard). I hold because i expect us to continue approaching the game-theoretic attractor. I've held for years and will keep holding. Every year, i see more and more people coming around to my perspective. How many years can you watch the price keep going up before you'll eventually consider that you might be missing something? > We know transactions are slow and expensive, lightning network obviates this problem > it’s often regulated such that it needs to be fully declared (removing the whole anti-gov part) The government still can't print more bitcoin, which is the main appeal for me. They also cant technically block anyone from recieving coins. They can make doing so a crime, but don't have the technical ability to, say, freeze funds. > typically markets eventually correct when there’s no underlying true value proposition Given that bitcoin is over 10 years old, shouldn't its longevity be taken as evidence that there is, indeed, a true value proposition? > which can be executed “well” Why is 'well' in quotes here? Are you open to the hypothesis that money printing exacerbates might cause long term issues in society?

xwolfi 6y ago
How many years can I watch you scam people with get rich quick arguments "invest now, it can only go up"? Forever. Make your money the way you want, but I wont participate in something I have no chance to control.
- tuesdayrain 6y ago
  >Make your money the way you want, but I wont participate in something I have no chance to control. Sounds like you should avoid effectively any form of investing according to this principle.
SomewhatLikely 6y ago
> They can make doing so a crime, but don't have the technical ability to, say, freeze funds. If the governments of the world made it a crime for miners to include transactions involving certain blacklisted addresses in their blocks that could be a big step towards a freeze.

bhupy 6y ago

I'm also still wrapping my head around this just like you, but I think I understand enough to answer some of your questions. > We know transactions are slow and expensive, so it’s not a good replacement for ordinary commerce. I don't think that this is obviously true. Digital transfer of the US Dollar is similarly slow and expensive (see: ACH, Wire, SWIFT). The response you'll hear the most frequently is that BTC (and digital currencies) should be compared to the US Dollar, not to Visa and Stripe and Venmo etc. Right now, if you want to send US dollars to somebody and you're unable to do it through PayPal/Venmo/Square/Visa/MasterCard, your best bet is to literally mail cash to the recipient. BTC solves that problem; you now have the option to send someone "cash" in a trust-less way, but that's probably not how the majority of people would use BTC. The blockchain doesn't have to be used to settle every single transaction in real-time, just like you don't have to use ACH/Wire to send $5 to someone electronically for every transaction. Just like banks today send a batched ACH files of all money movement at the end of the day, they may do the same on the blockchain hourly/daily. The benefit of BTC over USD is that there is a way to "mail someone a briefcase of cash" without having to actually mail them; instead you can "mail" it to them on the blockchain and have it take a few hours rather than 3-5 business days. If you want to send US dollars faster, you can rely on centralized institutions that build financial products on top of the US Dollar, but the same can happen on top of other non-government-backed currencies. Just like you have a bank account where you can see in Dollars or Yen or Pounds what your bank balance is, one ought to be able to open an account and see what their balance is in BTC or ETH or Nano...or so the argument goes. > It also lacks a lot of the controls that traditional banks have for good reasons, so fraud becomes harder to tackle, and things like refunds are just at the mercy of the other side of the transaction (making commerce even harder, as well as basic banking) Again, you want to compare BTC/ETH to the actual currencies, rather than the institutions that engage with those currencies. All of what you said is true of any fiat currency: I can physically hand you a $20 bill, and that transaction can happen in a totally un-traceable way already. There’s a common saying that if cash were invented today, it would be illegal, since it’s hard for the government to track and they wouldn’t like it. > So then it becomes a digital store of value, one that is only as valued as the market gives it, and typically markets eventually correct when there’s no underlying true value proposition (as we can see with $GME). This is a good point, but I found a good "counter-point" in Matt Levine's latest Bloomberg Money blog post: https://www.bloomberg.com/opinion/articles/2021-02-16/goldman-adds-robo-adviser-to-marcus-consumer-brand https://www.bloomberg.com/opinion/articles/2021-02-16/goldma... Here is the relevant bit: "We have talked a lot recently about the Reddit-fueled rally in meme stocks like GameStop Corp. One thing I have said about this rally is that it reflected Reddit traders’ correct understanding of a simple market dynamic, which is that if they all bought the same stock at once then it would go up. So they did. Institutional Bitcoin adoption, as we have also discussed, has a somewhat similar dynamic: Each time a big institution says “we like Bitcoin now,” Bitcoin goes up, because widespread mainstream institutional adoption is clearly bullish for Bitcoin at this point. So if you are a big institution or corporation, you can make some free money by (1) buying Bitcoin, (2) announcing “we like Bitcoin now,” (3) watching Bitcoin go up, and (4) selling the Bitcoins you bought for a quick profit. (Or keep them as a bet that other institutions will do the same thing and you’ll make even more profits.) This dynamic, separate from any particular institutional decision, is good for Bitcoin: If it’s in every big bank’s and corporation’s short-term financial interest to quietly buy some Bitcoins and then noisily make a show of adopting Bitcoin, then a lot of them will, which will have the effect of pushing up the price (both because of their buying and because of their announcements). Unlike meme stocks, there is no underlying business, no cash flows that do or don’t make the price make sense: The price of Bitcoin makes sense or not purely as a social fact; if there are “fundamentals,” they are things like “widespread mainstream adoption,” which you can provide. “The fundamentals of Bitcoin are strong, look, Morgan Stanley is buying some,” Morgan Stanley could plausibly say, after buying some Bitcoins. So it might as well do that. With the meme stocks the natural thing was to worry about the endgame for that process; you can’t have a stock price that is divorced from fundamental value forever. With Bitcoin, you ... can? Like if the endgame for Bitcoin was “universal adoption by corporations and institutions as a digital store of value,” then that sounds like a good and permanent and somehow fundamental result?" > so it’s terrible as a wide spread value store because it removes an important tool that governments have to handle the economy (dealt with debt via inflation aka printing money, which can be executed “well” (US) and really poorly (Zimbabwe)). This is very debatable, and you've more or less illustrated the controversy by pointing to a "good" version and a "bad" version. The political question is whether the possibility of "bad" means that the concept of government-controlled inflationary assets is inherently bad. I won't pretend that there's an objective answer, but neither should you; the fact that it removes the tool you describe can both be described as a feature or a bug, depending on your political leaning.

guiomie 6y ago

When I read a message like this, I conclude that bitcoin has another 10x to go since gold has a 10 trillion market cap. (Preemptively I'm going to say that gold market cap has almost nothing to do with its usage as a commodity, google it) reply

the_gastropod 6y ago
And the GDP of New Zealand will go up 100x because the USA has a $21T GDP. (Preemtively I’m going to say that US’s market cap has almost nothing to do with its sheep population, google it.)
graeme 6y ago
This seems to be flat out false. According to this 78% of gold globally is used in jewelry. Some other portion is used in electronics of industry. https://goldprice.com/project/facts-about-gold/ https://goldprice.com/project/facts-about-gold/ There’s no such reserve value for Bitcoin. You can’t look at it or hold it or do anything with it other than as a currency. I’ve seen widely varying stats estimating gold’s jewelry share but all of them are large.
- efwfwef 6y ago
  That's a moot point, Gold actual usage has no relation with its usage as a store of value. It's used as a store of value because it's shiny and people associates it with "value". Think: why are diamonds so expensive?
  - graeme 6y ago
    Maybe I don’t follow you but if more than half of gold use is jewelry then it seems the use has a lot to do with it’s value. People trade gold on top of that but it’s linked to use. If jewelry demand dropped 98% it would surely affect the price of gold.
    - efwfwef 6y ago
      > half of gold use is jewelry uh, no that's not true. I bet there's more bitcoin being used to buy drugs than gold being used in jewelry

whywhywhywhy 6y ago

>So it sounds like lemming group think. It seems like someone one should hold “just in case,” but no real valid reason to do so yet (that I’ve heard). Honestly what more do most people have? You could work your entire life but even all the earnings and scrimping and saving isn't even be a tiny fraction to what you would have if you had been the one to fulfil the order for the bitcoin pizza and just held. Think a lot of people misunderstand just how hopeless the world is for most people. GME and Doge are just the start, get used to hearing people are sinking their entire savings into far flung gambles multiple times a year from here on out. Especially in a post pandemic world where people are been completely downtrodden to their limit. Property is so exorbitant, pay is so low we're now entering a world where just gambling seems the smarter option than living within your means because anyone who has tried that can tell you it gets you nowhere. Pay just hasn't increased enough in line with property and your dollars are worth less and less every day.

FFRefresh 6y ago
I personally think that the huge increase in the money supply and all of the stimulus money that has went out to people is the primary fuel to speculative investing (like GME and Crypto). Savings rates in the pandemic have never been higher. I see it less as desperation and more of 'whoa, i have more money now, i want to put it into things that go up in value!'. I haven't seen the data (so do correct me), but I would suspect that less sophisticated retail investing is on the rise over the last year, correlating with increased savings.
tootie 6y ago
We used to call them Ponzi schemes. This is the same but in slow motion. People are going to start taking their profits at some point and whoever takes them last will be holding the bag.
- rlt 6y ago
  Or just lottery tickets, which are mostly purchased by low income folks, and legal/state-sponsored, no less.
- 6y ago

AmericanChopper 6y ago

When "the market" does something that somebody considers to be irrational, the explanation is almost certainly that they either simply don't understand it, or that they do understand it and they're just being judgemental about the motives at play. The reason it has value is because people have demand for it. People have demand for it for a variety of reasons. I think it's reasonable to presume that a non-trivial portion of that demand is driven by the features that make it a rather good black market currency. It's also obviously quite appealing to certain groups of privacy conscious individuals. I've heard it's somewhat popular for international remittances, which makes sense given the economic stability issues various places have around the world. On top of those fundamentals, demand is further inflated by speculators. Your biggest criticism seems to be that it would be a bad national currency because you can't implement a bitcoin monetary policy. But none of the demand for bitcoin is driven by that factor, so the observation is simply irrelevant.

AshWolfy 6y ago
Or maybe just markets are stupid and bitcoin is mostly driven by hype based speculators
- AmericanChopper 6y ago
  I think this would be covered by the "judgemental dismissal of market rationale" explanation I was talking about.
  - AshWolfy 6y ago
    Because they self evidently are, markets are so self evidently irrational the concept of "animal spirits" is one of the first thing we learned in econ 101, almost every post about the stock market will have someone saying the market can stay irrational longer than you can stay solvent unless you want to explain how what happened with gme reflected a rational valuation of the company
    - AmericanChopper 6y ago

tippytippytango 6y ago

Do you really want an answer to that question? Feels more like your are taking the temperature of the top minds of HN to decide if it's cool to like bitcoin yet.

graeme 6y ago
HN loved bitcoin circa 2011 and in the few years after that. Wish I’d paid attention. As you have made a totally new account you probably weren’t around for this.
- selestify 6y ago
  When did the shift happen and why?

spoonjim 6y ago

Criminal and black market transactions are a sizable fraction of the economy and bitcoin is a major financial innovation for this “sector.” The only problem is the price volatility, you don’t want to collect some money for Fat Tony and have it drop in value by 20% by the time you get it to him.

6nf 6y ago

Every minute, there are thousands of bitcoin transactions happening at dozens of exchanges, and it's happening instantly with very low cost. Because it's off-chain. That's what you're missing here, not everything needs to be on-chain to be valuable. Exchanges and businesses and services can aggregate.

dragontamer 6y ago
But if it's off chain, why use Bitcoin at all? If you never actually use the blockchain, then you don't really know if those BTC you 'bought' even exist.
- bitexploder 6y ago
  It’s still backed by the currency. Kind of like how when you make a stock trade the actual trade isn’t cleared for some time. In this way the blockchain of Bitcoin is simply transparent and easy to follow, if slow and expensive.
  - dragontamer 6y ago
    A big criticism of the current market is that Tethers aren't backed by anything. Nonetheless, there's a huge BTC and USDT and USD trade going on.
- efwfwef 6y ago
  The same reason why when you use Venmo you don't think "wait, why use USD at all if it's all a database?" The truth is, the current financial system is just a large number of databases trying to sync with one another, and one of cryptocurrencies' goal is to decrease this amount of databases.
  - dragontamer 6y ago
    > and one of cryptocurrencies' goal is to decrease this amount of databases. And replace them with one of the biggest wastes of electricity? What's the point of "getting rid of databases", when you end up needing them for something as fundamental as an BTC/USD exchange anyway?

bobbygoodlatte 6y ago

I know you don't control who upvotes your comment, but I find it funny this is the top rated comment. It has become a total HN cliché that the top comment is a negative takedown of the tech or startup in question. From Dropbox, to Coinbase, to Ethereum, and now to Bitcoin at 50k. Not refuting anything you're saying here. Just find it amusing to have seen this pattern play out so many times here on HN.

vmception 6y ago
entrepreneur works in blockchain sector and makes millions with no VCs: exists engineer working at morally dubious ad-retargeting analytics company: "this has no utility whatsoever ($30), I could do that with a database ($7,500)! I'm going to ignore this for entire decades! ($50,000)"
lm28469 6y ago
Isn't it pure survivorship bias ? The dropbox thing keeps on being mentioned but for 1 wrong comment about dropbox there are thousands negative valid comments about stupid and failed startups/ideas.

didibus 6y ago

Its got momentum as a crypto, in theory it could update itself to whatever would start being more valuable if needed. Also, I don't know if all investment need to make sense based on economic fundamentals, bitcoin makes sense at a psychological level why it is a good investment for now, as more and more people slowly decide they need to dip their toes in it as well.

bean5e 6y ago

lemming group think? do you have this concept of all crypto proponents as stupid lemmings all following each other not capable of independent, rational thought? i call a bunch of people serving 1% of the population without question lemmings. to try and falsely frame a legitimate worldwide, grassroots counterculture movement as just a bunch of stupid lemmings betrays your prejudice and makes it hardly surprising that you don't see any value in the space. i can't believe a bunch of "hackers" shit on the open source, decentralized internet of money. it's a currency created by real hackers for the internet. it is the first of an entirely new asset class that allows any person to be their own bank and has a hard cap on supply. Yes it's slow, but it's also extremely secure and resistant to change. >it’s often regulated such that it needs to be fully declared (removing the whole anti-gov part)... so fraud becomes harder to tackle which one is it? cash is the king of fraud and illegal activities anyway: fungible, anonymous, hard to trace. a public immutable database ought to make fraud much easier to weed out in the long run... >no underlying true value proposition it has outperformed every other asset in the world over the last decade, maybe you need to look a little closer to understand the value proposition. just because a bunch of bigots decide it has no value proposition doesn't make it true and obviously the market strongly disagrees with this sentiment. >It also pushes only towards deflation you mean poor people can have their money appreciate over time instead of having their meager savings robbed by an unseen, man-made market force? you mean people won't be so eager to waste their money on crap that causes pollution and ends up as landfill? i've never really understood the deflation argument, it's a textbook slippery slope. > removes an important tool that governments have to handle the economy if the government were truly democratic and benevolent this would be the case. unfortunately we live under a bunch of warmongering kleptocrats who need to be kept in check. more like an important tool to bail out themselves and their cronies after they fuck up the economy so badly with their corrupt, short-sighted practices. the people who seem to screech the loudest against cryptos seem to have a massive vested interest in maintaining the status quo. you really can't get how the economy might actually function better for most people if it wasn't serving as a welfare state for the elite? meanwhile the btc supercomputer keeps producing blocks, just like it has since day one.

efwfwef 6y ago

> So then it becomes a digital store of value, one that is only as valued as the market gives it, and typically markets eventually correct when there’s no underlying true value proposition (as we can see with $GME). You're not missing anything, you said it yourself it's a store of value. Maybe markets eventually correct, but in the last 10 years Bitcoin has only gone up, so if you had planned to use it to store value for 10 years a decode ago, then it worked pretty well. > It also pushes only towards deflation, so it’s terrible as a wide spread value store because it removes an important tool that governments have to handle the economy Well it's a store of value, not a tool for the gov to handle the economy.

Thorrez 6y ago
>in the last 10 years Bitcoin has only gone up It was $19k in Dec 2017 and $3k in Dec 2018.
- efwfwef 6y ago
  if you haven't sold*
  - Thorrez 6y ago
    It really depends on your definition of "only".

dogman144 6y ago

> What am I missing? > We know transactions are slow and expensive ^ You're missing this. * Cross-border transactions which would take days for Swift are instant * Expensive: no not really. In the filled mempool days, yes prices shot up, but that was a few years ago. Fees are incredibly low now. * Non-int transactions are still just about the same speed as a Visa cc/debit swipe. Again, when the mempool is going insane (hasn't happened in some time), yes TXs could take time vs. fees. However, nowadays it's just about as quick to reach a "basically verified" TX as it whatever risk mgmt balancing Visa is doing in the background. This time, instead of Visa's fraud department doing some checks, it's 1 or 2 blocks to very likely confirmed, 6 blocks to definite. Just different ways of skinning the same cat. You're correct on this > also lacks a lot of the controls that traditional banks have for good reasons, But you're blending some arguments that are counterfactual if taken together as something cohesive. It's fast because it doesn't have these controls, for instance.

moralsupply 6y ago

> What am I missing? You should short Bitcoin and make a lot of money