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What’s the point of a currency where you have to convert it to another currency to spend it? (I’ve got an idea, and I think the answer is speculation….) Conve

by Closi 5y ago

What’s the point of a currency where you have to convert it to another currency to spend it? (I’ve got an idea, and I think the answer is speculation….) Converting BTC to Fiat and then spending Fiat isn’t the same as buying things with Bitcoin. It’s buying things in Fiat with extra steps.

fvdessen 5y ago
If the extra step means my money doesn't lose value as government print cash like there's no tomorrow, then that step is quite valuable to me
- FalconSensei 5y ago
  It only loses value when Elon shitpost on Twitter, right?
- perl4ever 5y ago
  BTC seems to be about 10 times more volatile than the dollar on a daily basis. Like, last friday, the dollar was down about 0.4% and BTC was up or down 4-5% intraday. This seems to me kind of like the argument that the government is "just" another gang of armed bandits. There is a huge amount of value in predictable taxation rather than random robbery. Partly because of the variance, and partly because government has more of a long term interest in the viability of the citizenry, even if it weren't especially democratic per se. And similarly, there's a huge value in a currency that gradually loses value over time rather than being up or down 5% in a day and 30% in a few weeks. The whole point of currency is that it's not a long term investment asset, but a tool for trade, isn't it? So why would long run inflation be relevant?
  - a1369209993 5y ago
    > BTC seems to be about 10 times more volatile than the dollar on a daily basis. They're not talking about volatility; they're talking about the average trend over time.
    - perl4ever 5y ago
      I know. My point was this is the wrong focus, because of what currency is by nature. Short term volatility is a big disadvantage, while gradual loss in value doesn't matter for something that's not a long term investment. I owe way more money than I have in cash, as does almost everyone, and my loans being in nominal currency, inflation only helps.
      - a1369209993 5y ago
        > My point was this is the wrong focus, because of what currency is by nature. Ah, fair enough. That said: > I owe way more money than I have in cash, as does almost everyone, and my loans being in nominal currency, inflation only helps. This only works if you have a effective means of prohibiting (any) interest on those loans (ie anti-usury laws that actually have teeth). Otherwise the lender just bakes inflation into the interest.
        perl4ever 5y ago
        I don't know if you are American, but it's common here to have 30 year fixed rate mortgages. I gather that's rare most other places. So I'm supposing a typical scenario where a person borrowed or refinanced recently to lock in very low inflation expectations. That said, there are variable rate loans, but last year some lenders were actually offering such loans at a noticeable discount to prime (albeit with a floor that is above prime for now).
        a1369209993 5y ago
        > 30 year fixed rate mortgages. That helps a little, but relies on lenders underestimating future inflation. If they can predict X% inflation, they can price that into the initial fixed rate. So it's useful for making damages due to usury less variable - which is helpful for the same reasons insurance is helpful - but it doesn't usefully reduce them.
        perl4ever 5y ago
  - scrubs 5y ago
    Agree
- Qwertious 5y ago
  How is that different to investing in any other asset and then selling when you need to spend fiat currency, though?
jazzyjackson 5y ago
I convert my bank deposits to cash before spending it. It's not like there's cash in a vault with my name on it, I ask to withdraw cash and my checking account is debited. Doesn't seem so different than an exchange.
- Closi 5y ago
  It’s entirely different, because you are transacting in the same currency without an exchange mechanism required. This is important in days like today, where a coffee would cost more in BTC this evening than it would have this morning - how do I know how many BTC I have spent without referring to the current market price in USD and calculating it?

by Closi 5y ago

fvdessen 5y ago

If the extra step means my money doesn't lose value as government print cash like there's no tomorrow, then that step is quite valuable to me

FalconSensei 5y ago
It only loses value when Elon shitpost on Twitter, right?
perl4ever 5y ago
BTC seems to be about 10 times more volatile than the dollar on a daily basis. Like, last friday, the dollar was down about 0.4% and BTC was up or down 4-5% intraday. This seems to me kind of like the argument that the government is "just" another gang of armed bandits. There is a huge amount of value in predictable taxation rather than random robbery. Partly because of the variance, and partly because government has more of a long term interest in the viability of the citizenry, even if it weren't especially democratic per se. And similarly, there's a huge value in a currency that gradually loses value over time rather than being up or down 5% in a day and 30% in a few weeks. The whole point of currency is that it's not a long term investment asset, but a tool for trade, isn't it? So why would long run inflation be relevant?
- a1369209993 5y ago
  > BTC seems to be about 10 times more volatile than the dollar on a daily basis. They're not talking about volatility; they're talking about the average trend over time.
  - perl4ever 5y ago
    I know. My point was this is the wrong focus, because of what currency is by nature. Short term volatility is a big disadvantage, while gradual loss in value doesn't matter for something that's not a long term investment. I owe way more money than I have in cash, as does almost everyone, and my loans being in nominal currency, inflation only helps.
    - a1369209993 5y ago
      > My point was this is the wrong focus, because of what currency is by nature. Ah, fair enough. That said: > I owe way more money than I have in cash, as does almost everyone, and my loans being in nominal currency, inflation only helps. This only works if you have a effective means of prohibiting (any) interest on those loans (ie anti-usury laws that actually have teeth). Otherwise the lender just bakes inflation into the interest.
      - perl4ever 5y ago
        I don't know if you are American, but it's common here to have 30 year fixed rate mortgages. I gather that's rare most other places. So I'm supposing a typical scenario where a person borrowed or refinanced recently to lock in very low inflation expectations. That said, there are variable rate loans, but last year some lenders were actually offering such loans at a noticeable discount to prime (albeit with a floor that is above prime for now).
        a1369209993 5y ago
        > 30 year fixed rate mortgages. That helps a little, but relies on lenders underestimating future inflation. If they can predict X% inflation, they can price that into the initial fixed rate. So it's useful for making damages due to usury less variable - which is helpful for the same reasons insurance is helpful - but it doesn't usefully reduce them.
        perl4ever 5y ago
- scrubs 5y ago
  Agree
Qwertious 5y ago
How is that different to investing in any other asset and then selling when you need to spend fiat currency, though?

jazzyjackson 5y ago

I convert my bank deposits to cash before spending it. It's not like there's cash in a vault with my name on it, I ask to withdraw cash and my checking account is debited. Doesn't seem so different than an exchange.

Closi 5y ago
It’s entirely different, because you are transacting in the same currency without an exchange mechanism required. This is important in days like today, where a coffee would cost more in BTC this evening than it would have this morning - how do I know how many BTC I have spent without referring to the current market price in USD and calculating it?