4 ms·

The stock market has plunged 30% in a short period of time. Sure, it might be over a few weeks as opposed to days, but that's just a quantitative difference, no

by whack 5y ago

The stock market has plunged 30% in a short period of time. Sure, it might be over a few weeks as opposed to days, but that's just a quantitative difference, not qualitative. The main value propositions behind bitcoin are: - stable store of value in its end state (minimal inflation)(note: you'll see wild fluctuations during the interim period where its future is uncertain) - not under the control of any government or central authority (no risk of hyperinflation) - easy to store in large quantities (you don't need to buy a large vault just to store all your bitcoin) - easy to trade in large quantities (you don't need to hire trucks to transport your bitcoin) - easy to hide from a predatory tax regime (ie, communist takeovers) - may one day be accepted as a common currency for the above reasons, just like gold 100 years ago Investing in bitcoin is like investing in a startup. There are no guarantees, its value proposition is contentious, and it requires a leap of faith. I personally refuse to speculate on its success. But I don't see anything innately nonsensical or zero-sum about it

itake 5y ago
Clearly it’s failed at being a stable value
- whack 5y ago
  It's impossible for any currency to be stable in the period before it gains mainstream acceptance. Fiat currencies share the same fate
  - itake 5y ago
    The fundamental problem with BTC's stability is why spend it today if tomorrow it will be worth +20% more?
    - whack 5y ago
      You're right, it is not a good currency today. In the interim period, BTC is extremely risky, volatile, and not a stable store of value. The value proposition is that: - People will want to adopt BTC as a mainstream currency in future, for all the reasons I listed earlier - When BTC is adopted as a mainstream currency, the value of each BTC will be X (in relation to raw materials, manufactured goods, etc) - Because today's price of BTC is much smaller than X, you stand to make a huge profit if you buy BTC, and it later becomes a mainstream currency Ie, BTC is a startup that if successful, everyone will want to use in the future. And that makes it a very valuable investment for angels/VCs today
      - itake 5y ago
        > - People will want to adopt BTC as a mainstream currency in future, for all the reasons I listed earlier How can this happen if the price never stabilizes (because no one wants to spend what they have)? > - When BTC is adopted as a mainstream currency How can this happen if the transaction costs are $10+? To pay for a Starbucks coffee, it would cost $5 for the drink and $15 for the transaction fee. > - Because today's price of BTC is much smaller than X, you stand to make a huge profit if you buy BTC, and it later becomes a mainstream currency How can it become a mainstream currency if everyone treats it like a speculative investment and the transaction costs prevent it from used in "micro" transactions? The entire system disincentivises use as a "mainstream currency"

by whack 5y ago

itake 5y ago

Clearly it’s failed at being a stable value

whack 5y ago
It's impossible for any currency to be stable in the period before it gains mainstream acceptance. Fiat currencies share the same fate
- itake 5y ago
  The fundamental problem with BTC's stability is why spend it today if tomorrow it will be worth +20% more?
  - whack 5y ago
    You're right, it is not a good currency today. In the interim period, BTC is extremely risky, volatile, and not a stable store of value. The value proposition is that: - People will want to adopt BTC as a mainstream currency in future, for all the reasons I listed earlier - When BTC is adopted as a mainstream currency, the value of each BTC will be X (in relation to raw materials, manufactured goods, etc) - Because today's price of BTC is much smaller than X, you stand to make a huge profit if you buy BTC, and it later becomes a mainstream currency Ie, BTC is a startup that if successful, everyone will want to use in the future. And that makes it a very valuable investment for angels/VCs today
    - itake 5y ago
      > - People will want to adopt BTC as a mainstream currency in future, for all the reasons I listed earlier How can this happen if the price never stabilizes (because no one wants to spend what they have)? > - When BTC is adopted as a mainstream currency How can this happen if the transaction costs are $10+? To pay for a Starbucks coffee, it would cost $5 for the drink and $15 for the transaction fee. > - Because today's price of BTC is much smaller than X, you stand to make a huge profit if you buy BTC, and it later becomes a mainstream currency How can it become a mainstream currency if everyone treats it like a speculative investment and the transaction costs prevent it from used in "micro" transactions? The entire system disincentivises use as a "mainstream currency"