4 ms·

I agree that Bitcoin is here to stay and has utility. The issues that I have are 1) It is volatile and impossible to value; any price is as reasonable as any

by danhak 6y ago

I agree that Bitcoin is here to stay and has utility. The issues that I have are 1) It is volatile and impossible to value; any price is as reasonable as any other. What is my benchmark here? The amount of USD in circulation? The value of outstanding U.S. Government debt? (if it is indeed going to replace Treasuries as reserve currency / safe haven asset). Can someone more knowledgable than me chime in? 2) Its utility as a currency is inversely proportional to its utility as a speculative instrument. And speculation appears to be 99% of the interest and discussion.

anonisko 6y ago
All currencies are volatile against other currencies. Volatility of currency goes away (or rather, gets abstracted) within the context of locales where that currency is used as a unit of account and goods and services are directly priced in it. So far, this hasn't happened yet for bitcoin, because there is no central authority forcing it upon people. Nobody knows if, when, where, or how this unit of account transition will happen. Maybe Tesla prices the new roadster or cybertruck in bitcoin as a publicity stunt that starts a cascade. Maybe some country with a failing currency decides to issue a new currency backed with bitcoin, or their people start using it without permission and pricing emerges organically. Maybe Iran, Turkey, Venezuela, North Korea, Syria, and Cuba start using it as their currency for international trade. Or maybe it never will become a unit of account, and bitcoin will just find a role as an inflation hedge and long term store of value like gold, which is currently 10x as valuable as bitcoin.