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Bitcoin is only popular because tech workers get paid a lot and have the ability to speculate, we live in a world of massive asset bubbles created by government

Bitcoin is only popular because tech workers get paid a lot and have the ability to speculate, we live in a world of massive asset bubbles created by government fiscal policies and Bitcoin is excellent for buying drugs on-line. Most people want security in their assets, which is why a majority of folks read articles about bitcoin but never touch one. All of these articles are great examples of creative writing. I do kind of enjoy them.

arbawk 6y ago
Actually it's pretty important for many: https://www.youtube.com/watch?v=xLYYh4aPXAM https://www.youtube.com/watch?v=xLYYh4aPXAM It's being widely adopted in countries with inflating currencies: Nigeria, Vietnma, and Argentina made it to #3 today (this link is slightly old). https://www.statista.com/chart/18345/crypto-currency-adoption/ https://www.statista.com/chart/18345/crypto-currency-adoptio...
- deleted 6y ago
  [deleted]
- bena 6y ago
  I see this being thrown about as a talking point a lot, but I think it ignores what's fundamentally happening here. Bitcoin is essentially a proxy for another currency. Mostly the USD. These people need a way to protect their assets from what their own governments are doing to the value of their native currencies. They cannot buy securities or foreign currencies for various reasons. Bitcoin gives them a way. A way to convert their native currencies into USD, a stronger currency. So while it's a good use-case for Bitcoin, it's not exactly a situation that's applicable to the world at large.
  - andreygrehov 6y ago
    > Bitcoin is essentially a proxy for another currency. Yes, but this is only temporarily. It's like refactoring systems. You create a new system and a proxy and then have the old system communicate with the new one via the proxy (or vice versa). Eventually, the old system becomes obsolete, so you kill it and get rid of the proxy.
    - kortilla 6y ago
      But there is no evidence Bitcoin will ever make that transition. Gold has been around forever and we still don’t transact with it.
      - andreygrehov 6y ago
        Yes, but I foresee Bitcoin being used similar to how gold used to be used before.
    - PragmaticPulp 6y ago
      But if your proxy takes at least $10 of your currency every time you use it, you would expect people to look for a different proxy. In your example, Bitcoin would obviously be the "old system" if everyone wanted to use it for moving money around, because there are plenty of more advanced alternatives that work far better. So why is Bitcoin so popular? Because it's a speculative investment. A new asset class divorced from fundamentals, making it impossible to say when the value is too high. That's why people like it.
- PragmaticPulp 6y ago
  Ironically, the number of people who use Bitcoin directly (that is, on the blockchain with their own address) is significantly smaller. Most people use Bitcoin via exchanges, where they keep the coins. The average crypto user from Nigeria has zero interest in paying $10+ transaction fees every time they need to do anything with their money. At this point, it doesn't matter if they own BTC or ETH or DOGE or whatever. They just want whatever allows them to move money around. The exchanges could simply keep balances in a database and reconcile them amongst each other via contracts, and it wouldn't make any difference as far as the end users are concerned (There are examples of this happening between exchanges).
- dcist 6y ago
  I fail to see how something with wildly fluctuating value like bitcoin can ever serve as a stable currency or medium of exchange. Maybe it's a "less terrible" solution in poor countries with inflation challenges, but I don't see that as a strong proposition for the utility of bitcoin. Cigarettes are used as a medium of exchange in prison. That doesn't serve as a strong argument for using cigarettes as currency.
  - druidmaster 6y ago
    Volatility is only problematic to the downside, not the upside. Bitcoin's volatility is skewed to the upside. Yes if you were not advised properly, and buy the top, you may be down, but only temporarily. There are long phases in BTC's history where 100% of holders are in very handsome profits. And that's the problem?
    - dcist 6y ago
      No, it's also problematic to the upside if you're trying to use it as currency or medium of exchange rather than a speculative investment. How do sellers of assets price things? If I'm trying to sell a home in bitcoin and btc surges in value one day, do I lower my price accordingly? Or do I wait to see if btc goes back down a bit and settles? Volatility - both up and down - is destructive to price discovery. If you're just making long speculative investments in btc and volatility is skewed to the upside, well sure that's fine but you're not using bitcoin as a medium of exchange, you're investing in it as a security.
neilwilson 6y ago
"we live in a world of massive asset bubbles created by government fiscal policies" Do we? Or have we lived in a world where asset prices were suppressed due to artificial intervention by central banks. Interest rate setting is a market intervention. If left to its own devices the market rate would be driven down towards zero.
- flurben 6y ago
  > If left to its own devices the market rate would be driven down towards zero. How do you figure?
  - neilwilson 6y ago
    Banks can't get rid of reserves at the central bank in aggregate. They can only get rid of them to other banks. So there is no need for the central bank to pay them. Since there are always more reserves than required, and no alternative source of interest, the inter bank rate would be driven to zero by supply and demand. That's then the 'market rate'. You can't hold reserves so the bank can charge you extra for borrowing money. Only banks can get zero. How do you think central bank rates bind? It gives banks an alternative source of interest other than lending them to each other.
    - flurben 6y ago
      ok. it seems our differences here are more in definitions and semantics I interpret the phrase 'left to their own devices' to mean that there is no central bank and therefore reserves are as a concept are null and void, which then also nullify the concept of a federal funds rate, which would upend the concept of the federal funds rate being 'the market rate' in the first place. I'll take your word for it about the mechanics of what happens to inter-bank rates under different reserve mechanisms, perhaps they would be driven to zero for the reasons you outlined. However I'm unclear on what the macroeconomic ramifications would be of letting a small group of banks dictate the federal funds rate; I believe the purpose of this system is to achieve a congressional directive regarding price stability and labor utilization.
- 6y ago
capableweb 6y ago
> Bitcoin is excellent for buying drugs on-line. Out of all cryptocurrencies that exist today, Bitcoin is probably the worst one for buying drugs online. It's pseudo-anonymous at best (compared to Zcash that is actually anonymous), slower than many others and if government agencies have tracking tools in the cryptocurrency space, Bitcoin is probably the most popular target for those tools.
- vocatus_gate 6y ago
  Zcash is not anonymous; cloaked transactions are optional and hardly anyone uses them (so they stick out like a sore thumb). It also requires trust that the founders aren't printing hidden coins (due to its flawed "trusted initialization" procedure used at the coins inception). Monero/XMR is the only 100% private, fungible cryptocurrency. All transactions enforced private by default, with no option to send an un-private transaction.
tootahe45 6y ago
I'm pretty sure it's primarily poor people buying into crypto, not tech workers. Go to r/cryptocurrency and read the posts, does it look like HN (primarily tech people)? are there any technical discussions, or is it just full of get-rich-quick hopers? hint: posts mostly consist of "<famous guy> tweeted about <my favourite shitcoin>, this is good for the price of <my favourite shitcoin>".
- vocatus_gate 6y ago
  Correct. If anything, tech workers like we find on HN tend to be more openly against Bitcoin (specifically) and cryptocurrency in general. The people I see buying it on /r/cryptocurrency are the ones posting "finally managed to get 0.01 BTC!"

arbawk 6y ago

Actually it's pretty important for many: https://www.youtube.com/watch?v=xLYYh4aPXAM https://www.youtube.com/watch?v=xLYYh4aPXAM It's being widely adopted in countries with inflating currencies: Nigeria, Vietnma, and Argentina made it to #3 today (this link is slightly old). https://www.statista.com/chart/18345/crypto-currency-adoption/ https://www.statista.com/chart/18345/crypto-currency-adoptio...

deleted 6y ago
[deleted]
bena 6y ago
I see this being thrown about as a talking point a lot, but I think it ignores what's fundamentally happening here. Bitcoin is essentially a proxy for another currency. Mostly the USD. These people need a way to protect their assets from what their own governments are doing to the value of their native currencies. They cannot buy securities or foreign currencies for various reasons. Bitcoin gives them a way. A way to convert their native currencies into USD, a stronger currency. So while it's a good use-case for Bitcoin, it's not exactly a situation that's applicable to the world at large.
- andreygrehov 6y ago
  > Bitcoin is essentially a proxy for another currency. Yes, but this is only temporarily. It's like refactoring systems. You create a new system and a proxy and then have the old system communicate with the new one via the proxy (or vice versa). Eventually, the old system becomes obsolete, so you kill it and get rid of the proxy.
  - kortilla 6y ago
    But there is no evidence Bitcoin will ever make that transition. Gold has been around forever and we still don’t transact with it.
    - andreygrehov 6y ago
      Yes, but I foresee Bitcoin being used similar to how gold used to be used before.
  - PragmaticPulp 6y ago
    But if your proxy takes at least $10 of your currency every time you use it, you would expect people to look for a different proxy. In your example, Bitcoin would obviously be the "old system" if everyone wanted to use it for moving money around, because there are plenty of more advanced alternatives that work far better. So why is Bitcoin so popular? Because it's a speculative investment. A new asset class divorced from fundamentals, making it impossible to say when the value is too high. That's why people like it.
PragmaticPulp 6y ago
Ironically, the number of people who use Bitcoin directly (that is, on the blockchain with their own address) is significantly smaller. Most people use Bitcoin via exchanges, where they keep the coins. The average crypto user from Nigeria has zero interest in paying $10+ transaction fees every time they need to do anything with their money. At this point, it doesn't matter if they own BTC or ETH or DOGE or whatever. They just want whatever allows them to move money around. The exchanges could simply keep balances in a database and reconcile them amongst each other via contracts, and it wouldn't make any difference as far as the end users are concerned (There are examples of this happening between exchanges).
dcist 6y ago
I fail to see how something with wildly fluctuating value like bitcoin can ever serve as a stable currency or medium of exchange. Maybe it's a "less terrible" solution in poor countries with inflation challenges, but I don't see that as a strong proposition for the utility of bitcoin. Cigarettes are used as a medium of exchange in prison. That doesn't serve as a strong argument for using cigarettes as currency.
- druidmaster 6y ago
  Volatility is only problematic to the downside, not the upside. Bitcoin's volatility is skewed to the upside. Yes if you were not advised properly, and buy the top, you may be down, but only temporarily. There are long phases in BTC's history where 100% of holders are in very handsome profits. And that's the problem?
  - dcist 6y ago
    No, it's also problematic to the upside if you're trying to use it as currency or medium of exchange rather than a speculative investment. How do sellers of assets price things? If I'm trying to sell a home in bitcoin and btc surges in value one day, do I lower my price accordingly? Or do I wait to see if btc goes back down a bit and settles? Volatility - both up and down - is destructive to price discovery. If you're just making long speculative investments in btc and volatility is skewed to the upside, well sure that's fine but you're not using bitcoin as a medium of exchange, you're investing in it as a security.

neilwilson 6y ago

"we live in a world of massive asset bubbles created by government fiscal policies" Do we? Or have we lived in a world where asset prices were suppressed due to artificial intervention by central banks. Interest rate setting is a market intervention. If left to its own devices the market rate would be driven down towards zero.

flurben 6y ago
> If left to its own devices the market rate would be driven down towards zero. How do you figure?
- neilwilson 6y ago
  Banks can't get rid of reserves at the central bank in aggregate. They can only get rid of them to other banks. So there is no need for the central bank to pay them. Since there are always more reserves than required, and no alternative source of interest, the inter bank rate would be driven to zero by supply and demand. That's then the 'market rate'. You can't hold reserves so the bank can charge you extra for borrowing money. Only banks can get zero. How do you think central bank rates bind? It gives banks an alternative source of interest other than lending them to each other.
  - flurben 6y ago
    ok. it seems our differences here are more in definitions and semantics I interpret the phrase 'left to their own devices' to mean that there is no central bank and therefore reserves are as a concept are null and void, which then also nullify the concept of a federal funds rate, which would upend the concept of the federal funds rate being 'the market rate' in the first place. I'll take your word for it about the mechanics of what happens to inter-bank rates under different reserve mechanisms, perhaps they would be driven to zero for the reasons you outlined. However I'm unclear on what the macroeconomic ramifications would be of letting a small group of banks dictate the federal funds rate; I believe the purpose of this system is to achieve a congressional directive regarding price stability and labor utilization.
6y ago

capableweb 6y ago

> Bitcoin is excellent for buying drugs on-line. Out of all cryptocurrencies that exist today, Bitcoin is probably the worst one for buying drugs online. It's pseudo-anonymous at best (compared to Zcash that is actually anonymous), slower than many others and if government agencies have tracking tools in the cryptocurrency space, Bitcoin is probably the most popular target for those tools.

vocatus_gate 6y ago
Zcash is not anonymous; cloaked transactions are optional and hardly anyone uses them (so they stick out like a sore thumb). It also requires trust that the founders aren't printing hidden coins (due to its flawed "trusted initialization" procedure used at the coins inception). Monero/XMR is the only 100% private, fungible cryptocurrency. All transactions enforced private by default, with no option to send an un-private transaction.

tootahe45 6y ago

I'm pretty sure it's primarily poor people buying into crypto, not tech workers. Go to r/cryptocurrency and read the posts, does it look like HN (primarily tech people)? are there any technical discussions, or is it just full of get-rich-quick hopers? hint: posts mostly consist of "<famous guy> tweeted about <my favourite shitcoin>, this is good for the price of <my favourite shitcoin>".

vocatus_gate 6y ago
Correct. If anything, tech workers like we find on HN tend to be more openly against Bitcoin (specifically) and cryptocurrency in general. The people I see buying it on /r/cryptocurrency are the ones posting "finally managed to get 0.01 BTC!"