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The article conveniently left out one of the most important reasons holding BTC could be valuable - beating inflation and government currency controls. The US

by intev 5y ago

The article conveniently left out one of the most important reasons holding BTC could be valuable - beating inflation and government currency controls. The US is on a money printing spree and many are expecting high inflation. If you want to park your money and ensure it keeps growing in value to counteract inflation BTC seems like a good way to do it. In some countries, these effects are way more pronounced where inflation is significantly higher and capital controls are so stringent that you have limits on how many dollars you can take out of the country or what you can buy online with a credit card. In these countries, they don't want you to save in dollars because it keeps devaluing the local currency. In fact, they make it incredibly difficult to even get access to dollars. So what are you to do if you work hard, make money, and want to save? You know that your money is getting discounted every single year.

danaris 5y ago
This argument has always rung hollow to me. Not being attached to any specific fiat currency means it's possible for it to beat inflation, yes—but it also means it's possible for it to lose out horribly. Look at how various cryptocurrencies have performed in practice: sure, Bitcoin has skyrocketed recently, but overall it's been incredibly volatile. Most other coins have either remained obscure and niche, or followed a similar trajectory to Bitcoin at various points in its lifetime—that is to say, volatile and very subject to the whims of speculators. Even now, there's enough uncertainty around the whole space that Bitcoin could still crater spectacularly if, say, the US or EU outlaws cryptocurrencies, or imposes some other new kind of regulation that changes the cost/benefit analysis to speculators. Because that's the majority of the reason for their value: speculators looking to cash in. That's no way to build a stable digital economy.
- intev 5y ago
  > means it's possible for it to lose out horribly. Yea, as with any risk, it's possible for the risky bet you are taking to end up being.....risky...that's why it provide asymmetric returns. Obviously the appetite for risk is an extremely personal preference. The way I see it, this is a once in a life time opportunity to get in as institutional money is pouring in and its legitimacy is still being debated. Because once it becomes legitimized there won't be any real opportunity. It will become boring and very predictable. Also in some countries there's literally no choice. It's either the local bank which forces you to save in the local currency and your savings become discounted every year, or this, which, while risky, seems to solve two problems (retain and grow your nest egg).
almost_usual 5y ago
Beat out inflation but if you bought last week you lost 20% of your investment. Stocks or housing sound like a better long term way to keep up with inflation.
- intev 5y ago
  Sure in a short time horizon. That can be said for a lot of asset classes, including buying a stock index which generally is considered to be a pretty safe investment. However, if you bought at any point last year, you are up massively. If you buy moving forward there will probably be a draw down in the bear market, but in a 4+ year time horizon your returns will be spectacular. No stock or asset gives you similar returns. If your goal is to accumulate and build a nest egg for 10+ year out, I'm hard pressed to find anything similar. Also with houses, they are incredibly illiquid unless your property is in a very hot zone, which also generally tend to be part of demand cycles.
HWR_14 5y ago
Bitcoin isn't unique in the grand purpose of being "not cash". There is real estate, stocks or even pokemon cards. I'm not sure why BTC is the asset I should be using since all the reasons BTC has been promoted as seem not useful.

by intev 5y ago

danaris 5y ago

This argument has always rung hollow to me. Not being attached to any specific fiat currency means it's possible for it to beat inflation, yes—but it also means it's possible for it to lose out horribly. Look at how various cryptocurrencies have performed in practice: sure, Bitcoin has skyrocketed recently, but overall it's been incredibly volatile. Most other coins have either remained obscure and niche, or followed a similar trajectory to Bitcoin at various points in its lifetime—that is to say, volatile and very subject to the whims of speculators. Even now, there's enough uncertainty around the whole space that Bitcoin could still crater spectacularly if, say, the US or EU outlaws cryptocurrencies, or imposes some other new kind of regulation that changes the cost/benefit analysis to speculators. Because that's the majority of the reason for their value: speculators looking to cash in. That's no way to build a stable digital economy.

intev 5y ago
> means it's possible for it to lose out horribly. Yea, as with any risk, it's possible for the risky bet you are taking to end up being.....risky...that's why it provide asymmetric returns. Obviously the appetite for risk is an extremely personal preference. The way I see it, this is a once in a life time opportunity to get in as institutional money is pouring in and its legitimacy is still being debated. Because once it becomes legitimized there won't be any real opportunity. It will become boring and very predictable. Also in some countries there's literally no choice. It's either the local bank which forces you to save in the local currency and your savings become discounted every year, or this, which, while risky, seems to solve two problems (retain and grow your nest egg).

almost_usual 5y ago

Beat out inflation but if you bought last week you lost 20% of your investment. Stocks or housing sound like a better long term way to keep up with inflation.

intev 5y ago
Sure in a short time horizon. That can be said for a lot of asset classes, including buying a stock index which generally is considered to be a pretty safe investment. However, if you bought at any point last year, you are up massively. If you buy moving forward there will probably be a draw down in the bear market, but in a 4+ year time horizon your returns will be spectacular. No stock or asset gives you similar returns. If your goal is to accumulate and build a nest egg for 10+ year out, I'm hard pressed to find anything similar. Also with houses, they are incredibly illiquid unless your property is in a very hot zone, which also generally tend to be part of demand cycles.

HWR_14 5y ago

Bitcoin isn't unique in the grand purpose of being "not cash". There is real estate, stocks or even pokemon cards. I'm not sure why BTC is the asset I should be using since all the reasons BTC has been promoted as seem not useful.