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Let's look at it from the perspective of "I'm going to put my life savings into this thing" and hold on to it for at least 10+ years. Do I put it into Bitcoin

Let's look at it from the perspective of "I'm going to put my life savings into this thing" and hold on to it for at least 10+ years. Do I put it into Bitcoin which is simple, secure, battle tested, moves slowly but with broad consensus, has had a much fairer distribution, is not controlled by the whims of it's creator, etc? Or do I put it into eth that's been forked pretty easily after the dao hack, moves much faster, has significantly more complexity and critical bugs go unnoticed for months[1], that's in the middle of switching over to a significantly more complex, not battle-tested long enough PoS system with significant technical and also philosophical problems like embedding "rich gets richer" deep into the protocol, that's been pitched as a smart contract platform for years? You can still use the smart contracts using Bitcoin on top of eth, so it's not like you don't have access to them. The way I look at it, Bitcoin is my data (aka value) and eth is my computer (aka financial transaction platform), I switch computers every other year, but my data comes along with me. This is the question I've been pondering lately and it's pretty clear to me which one I'm choosing. That said, I have a stake in both and hope both succeed. 1: https://cryptonews.com/news/disclosed-ethereum-lived-with-a-major-threat-for-18-months-10368.htm https://cryptonews.com/news/disclosed-ethereum-lived-with-a-...

arcticbull 5y ago
Generally one doesn't invest in currencies. Currencies aren't an asset class [1], and a currency isn't an asset. One uses currencies to buy assets. Conflating the two would be an economic catastrophe, as nobody spends an appreciating asset. That's why currencies and assets are forked the way they are. Proof is in the pudding: Pomp's Bitcoin Pizza cannot be paid for in Bitcoin - or any other crypto. [1] https://www.commonfund.org/blog/is-currency-an-asset-class#:~:text=Currencies%20are%20not%20an%20asset,trade%20compared%20to%20another%20currency.&text=There%20are%20few%20certainties%20in,point%2C%20you%20will%20lose%20money https://www.commonfund.org/blog/is-currency-an-asset-class#:....
- rawtxapp 5y ago
  What happens between the day of creation (when it's worth 0) and the day Bitcoin becomes global reserve currency (worth multiple trillions of dollars)? It acts as a highly appreciating asset with a great upside. Also, I agree with you, I wish IRS would treat it as currency so that we won't have to pay capital gains taxes on it.
  - thefounder 5y ago
    >> What happens between the day of creation (when it's worth 0) and the day Bitcoin becomes global reserve currency (worth multiple trillions of dollars)? You wake up and it's morning. That happens.
- vmception 5y ago
  There are many sales pitches, the merchant currency adoption being just one and the weakest
  - deleted 5y ago
    [deleted]
- cableshaft 5y ago
  Are you arguing that cryptocurrencies are a currency, and therefore not an asset class, or that cryptocurrencies are not a currency, because they are an asset class? Because the way you worded it made it seem like the former, but your article makes it pretty clear to me that cryptocurrencies don't fit its definition for currency. The US government has decided to treat crypto as a digital asset and not as a currency, at least, especially for the purposes of taxes.
- petertodd 5y ago
  > Pomp's Bitcoin Pizza cannot be paid for in Bitcoin ...which got him a lot of press and attention, far more than had he accepted Bitcoin. That's kinda boring these days. The idea that nobody spends an appreciating asset is silly. I have BTC, and I need to buy things. One way or another I need to spend my wealth. How exactly I chose to do that comes down to things like convenience, privacy, conversion costs, etc. Quite often, yes, BTC won't be the most convenient or cheapest way to buy things! But sometimes it is, and when it is, my decision to spend my wealth isn't impacted by whether or not the asset I happen to use is appreciating. It makes sense for me to spend BTC more than most people, because I'm often paid in BTC by foreign clients. So I tend to have an excess of it. But if I were, say, buying porn on a site like ManyVids, or refilling a burner phone's credit via Bitrefill, regardless of whether or not I had excess BTC I'd much rather get the privacy benefit of paying with a BTC/BTC Lightning wallet than giving my name and address with a credit card. And yes, both those sites do in fact do Lightning payments; I won't admit whether or not I've checked that myself. :)
  - arcticbull 5y ago
    Why would you ever spend an asset that you think is going to be worth more tomorrow than it is today? Doesn't make sense, you'd just borrow against it and wait. This is how the majority of the wealthy handle their investments. Buy, hold, borrow against it, spend. This is even doubly tax advantaged, as you don't have to recognize your capital gains - and you can deduct your margin interest.
    - petertodd 5y ago
      Because these forms of wealth are fungible: if I spend fiat, that just means I have less fiat in the future that could be put into Bitcoin. The only difference is the conversion costs - depending on what exactly is the financial situation you might be saving a conversion cost by either spending fiat or spending BTC. Keep in mind, because Bitcoin is an appreciating asset, sane investors will often need to spend their BTC to re-balance their overall portfolios. If I had never sold my BTC, essentially all my wealth would be in BTC, which is reckless. Spending my BTC directly vs trading it for fiat and then spending the fiat at minimum reduces the number of conversions needed, is better for privacy, and can even be more convenient now that Lightning works pretty well. > Doesn't make sense, you'd just borrow against it and wait. I have zero interest in taking that kind of risk, and I'm certainly not alone.
thefounder 5y ago
>> life savings into this thing If you put your life savings in crypto currencies you should be prepared to loose it all. Consider working on your FOMO before to start investing/gambling. It's a risky asset and I would say it will become worthless as store of value but that's a different discussion.
- rawtxapp 5y ago
  For sure, it's very risky, highly volatile and nobody should put more money than they are willing to lose. But if you don't trust your gov/central bankers then crypto is one(only?) way to opt out.
  - thefounder 5y ago
    The issue is that the value of crypto is influenced by gov/central bankers as well. I really don't see how you could hold and trade assets if your gov doesn't want to. It can simply make it illegal like they did in China. As a business you can't sell services using illegal currency so your crypto currency treasure becomes worthless because you can't buy a loaf of bread with it.
    - arcticbull 5y ago
      China, India and Nigeria have made - or are in the process of making - crypto illegal. That's about 30% of the world's population. More to come.
      - cableshaft 5y ago
        China did not make crypto illegal. "China has banned crypto exchanges and initial coin offerings but has not barred individuals from holding cryptocurrencies." https://www.cnbc.com/2021/05/18/china-bans-financial-payment-institutions-from-cryptocurrency-business.html https://www.cnbc.com/2021/05/18/china-bans-financial-payment... India is likely to just regulate crypto, not ban it outright, even though an official made the claim back in March that they were going to: "The central government may form a fresh panel of experts to study the possibility of regulating cryptocurrency in India, three sources privy of the discussions told ET. This comes amid the prevailing view that the recommendations by a committee headed by former finance secretary Subhash Garg in 2019 for a blanket ban on these assets had become outdated." https://economictimes.indiatimes.com/tech/technology/govt-may-set-up-new-panel-to-study-crypto-regulations/articleshow/82746324.cms https://economictimes.indiatimes.com/tech/technology/govt-ma... Nigeria did not ban crypto. "According to local publication TodayNG, Adamu Lamtek, the Deputy Governor of the monetary regulator, said that the CBN did not ban Nigerians from buying, selling or holding cryptocurrencies but protected the banking sector from the activities of cryptocurrencies. Additionally, he clarified that the central bank did not place any restrictions on cryptocurrencies in general and is not discouraging people from trading them." https://www.financemagnates.com/cryptocurrency/regulation/nigeria-didnt-ban-crypto-official-clarifies-on-earlier-order/ https://www.financemagnates.com/cryptocurrency/regulation/ni... Nothing stopping people in China or Nigeria from having crypto, just certain institutions. And I doubt India goes through with a full ban on it.
whatshisface 5y ago
>philosophical problems like embedding "rich gets richer" deep into the protocol Proof of work is a pretty clear "rich get richer" system, except it's the rich with stakes in energy companies, semiconductor fabs, and mining hardware that get richer, not the rich in Bitcoin.
- rawtxapp 5y ago
  How do they cover those costs? By selling it on the market. As a PoS staker, all I have to do is provide a cryptographic signature and I have zero pressure to sell the coins I receive on exchanges.
  - samatman 5y ago
    The "income tax as forcing function" bit in the OP was pretty rich. Like someone staking millions of dollars worth of ETH can't set up a shell company in a tax haven to own the resulting riches?
- gwicks56 5y ago
  Different issues. In PoS, the people with the most coins decide the protocol. In PoW, the people running nodes decide the protocol. See Segwit2x debate.
  - whatshisface 5y ago
    But coins are fungible with dollars and dollars are fungible with mining the most coins... Most coins <-> Most USD <-> Most mining power <-> Most stake <-> Most coins.
    - gwicks56 5y ago
      yeah, but that doesn't matter, no matter how much you mine, or how many coins you have, you don't get any more say in the protocol rules than the people running the nodes. Your stake is irrelevant, and whilst your hashpower secures the network, if you try to break/change the rules, nobody will accept the coins you mine.
vmception 5y ago
The answers depends on which 10 years of your life that you’re in
awrence 5y ago
Couldn't agree more. Very well said.
- rawtxapp 5y ago
  Whether I answer this question correctly or not will have significant financial consequences for me, so I'm trying to be as fair and balanced as possible.
DavideNL 5y ago
> The way I look at it, Bitcoin is my data (aka value) and eth is my computer (aka financial transaction platform), I switch computers every other year, but my data comes along with me. Is Bitcoin the data, or is it the harddrive? Because i switch harddrives every other 5 years too...

arcticbull 5y ago

Generally one doesn't invest in currencies. Currencies aren't an asset class [1], and a currency isn't an asset. One uses currencies to buy assets. Conflating the two would be an economic catastrophe, as nobody spends an appreciating asset. That's why currencies and assets are forked the way they are. Proof is in the pudding: Pomp's Bitcoin Pizza cannot be paid for in Bitcoin - or any other crypto. [1] https://www.commonfund.org/blog/is-currency-an-asset-class#:~:text=Currencies%20are%20not%20an%20asset,trade%20compared%20to%20another%20currency.&text=There%20are%20few%20certainties%20in,point%2C%20you%20will%20lose%20money https://www.commonfund.org/blog/is-currency-an-asset-class#:....

rawtxapp 5y ago
What happens between the day of creation (when it's worth 0) and the day Bitcoin becomes global reserve currency (worth multiple trillions of dollars)? It acts as a highly appreciating asset with a great upside. Also, I agree with you, I wish IRS would treat it as currency so that we won't have to pay capital gains taxes on it.
- thefounder 5y ago
  >> What happens between the day of creation (when it's worth 0) and the day Bitcoin becomes global reserve currency (worth multiple trillions of dollars)? You wake up and it's morning. That happens.
vmception 5y ago
There are many sales pitches, the merchant currency adoption being just one and the weakest
- deleted 5y ago
  [deleted]
cableshaft 5y ago
Are you arguing that cryptocurrencies are a currency, and therefore not an asset class, or that cryptocurrencies are not a currency, because they are an asset class? Because the way you worded it made it seem like the former, but your article makes it pretty clear to me that cryptocurrencies don't fit its definition for currency. The US government has decided to treat crypto as a digital asset and not as a currency, at least, especially for the purposes of taxes.
petertodd 5y ago
> Pomp's Bitcoin Pizza cannot be paid for in Bitcoin ...which got him a lot of press and attention, far more than had he accepted Bitcoin. That's kinda boring these days. The idea that nobody spends an appreciating asset is silly. I have BTC, and I need to buy things. One way or another I need to spend my wealth. How exactly I chose to do that comes down to things like convenience, privacy, conversion costs, etc. Quite often, yes, BTC won't be the most convenient or cheapest way to buy things! But sometimes it is, and when it is, my decision to spend my wealth isn't impacted by whether or not the asset I happen to use is appreciating. It makes sense for me to spend BTC more than most people, because I'm often paid in BTC by foreign clients. So I tend to have an excess of it. But if I were, say, buying porn on a site like ManyVids, or refilling a burner phone's credit via Bitrefill, regardless of whether or not I had excess BTC I'd much rather get the privacy benefit of paying with a BTC/BTC Lightning wallet than giving my name and address with a credit card. And yes, both those sites do in fact do Lightning payments; I won't admit whether or not I've checked that myself. :)
- arcticbull 5y ago
  Why would you ever spend an asset that you think is going to be worth more tomorrow than it is today? Doesn't make sense, you'd just borrow against it and wait. This is how the majority of the wealthy handle their investments. Buy, hold, borrow against it, spend. This is even doubly tax advantaged, as you don't have to recognize your capital gains - and you can deduct your margin interest.
  - petertodd 5y ago
    Because these forms of wealth are fungible: if I spend fiat, that just means I have less fiat in the future that could be put into Bitcoin. The only difference is the conversion costs - depending on what exactly is the financial situation you might be saving a conversion cost by either spending fiat or spending BTC. Keep in mind, because Bitcoin is an appreciating asset, sane investors will often need to spend their BTC to re-balance their overall portfolios. If I had never sold my BTC, essentially all my wealth would be in BTC, which is reckless. Spending my BTC directly vs trading it for fiat and then spending the fiat at minimum reduces the number of conversions needed, is better for privacy, and can even be more convenient now that Lightning works pretty well. > Doesn't make sense, you'd just borrow against it and wait. I have zero interest in taking that kind of risk, and I'm certainly not alone.

thefounder 5y ago

>> life savings into this thing If you put your life savings in crypto currencies you should be prepared to loose it all. Consider working on your FOMO before to start investing/gambling. It's a risky asset and I would say it will become worthless as store of value but that's a different discussion.

rawtxapp 5y ago
For sure, it's very risky, highly volatile and nobody should put more money than they are willing to lose. But if you don't trust your gov/central bankers then crypto is one(only?) way to opt out.
- thefounder 5y ago
  The issue is that the value of crypto is influenced by gov/central bankers as well. I really don't see how you could hold and trade assets if your gov doesn't want to. It can simply make it illegal like they did in China. As a business you can't sell services using illegal currency so your crypto currency treasure becomes worthless because you can't buy a loaf of bread with it.
  - arcticbull 5y ago
    China, India and Nigeria have made - or are in the process of making - crypto illegal. That's about 30% of the world's population. More to come.
    - cableshaft 5y ago
      China did not make crypto illegal. "China has banned crypto exchanges and initial coin offerings but has not barred individuals from holding cryptocurrencies." https://www.cnbc.com/2021/05/18/china-bans-financial-payment-institutions-from-cryptocurrency-business.html https://www.cnbc.com/2021/05/18/china-bans-financial-payment... India is likely to just regulate crypto, not ban it outright, even though an official made the claim back in March that they were going to: "The central government may form a fresh panel of experts to study the possibility of regulating cryptocurrency in India, three sources privy of the discussions told ET. This comes amid the prevailing view that the recommendations by a committee headed by former finance secretary Subhash Garg in 2019 for a blanket ban on these assets had become outdated." https://economictimes.indiatimes.com/tech/technology/govt-may-set-up-new-panel-to-study-crypto-regulations/articleshow/82746324.cms https://economictimes.indiatimes.com/tech/technology/govt-ma... Nigeria did not ban crypto. "According to local publication TodayNG, Adamu Lamtek, the Deputy Governor of the monetary regulator, said that the CBN did not ban Nigerians from buying, selling or holding cryptocurrencies but protected the banking sector from the activities of cryptocurrencies. Additionally, he clarified that the central bank did not place any restrictions on cryptocurrencies in general and is not discouraging people from trading them." https://www.financemagnates.com/cryptocurrency/regulation/nigeria-didnt-ban-crypto-official-clarifies-on-earlier-order/ https://www.financemagnates.com/cryptocurrency/regulation/ni... Nothing stopping people in China or Nigeria from having crypto, just certain institutions. And I doubt India goes through with a full ban on it.

whatshisface 5y ago

>philosophical problems like embedding "rich gets richer" deep into the protocol Proof of work is a pretty clear "rich get richer" system, except it's the rich with stakes in energy companies, semiconductor fabs, and mining hardware that get richer, not the rich in Bitcoin.

rawtxapp 5y ago
How do they cover those costs? By selling it on the market. As a PoS staker, all I have to do is provide a cryptographic signature and I have zero pressure to sell the coins I receive on exchanges.
- samatman 5y ago
  The "income tax as forcing function" bit in the OP was pretty rich. Like someone staking millions of dollars worth of ETH can't set up a shell company in a tax haven to own the resulting riches?
gwicks56 5y ago
Different issues. In PoS, the people with the most coins decide the protocol. In PoW, the people running nodes decide the protocol. See Segwit2x debate.
- whatshisface 5y ago
  But coins are fungible with dollars and dollars are fungible with mining the most coins... Most coins <-> Most USD <-> Most mining power <-> Most stake <-> Most coins.
  - gwicks56 5y ago
    yeah, but that doesn't matter, no matter how much you mine, or how many coins you have, you don't get any more say in the protocol rules than the people running the nodes. Your stake is irrelevant, and whilst your hashpower secures the network, if you try to break/change the rules, nobody will accept the coins you mine.

vmception 5y ago

The answers depends on which 10 years of your life that you’re in

awrence 5y ago

Couldn't agree more. Very well said.

rawtxapp 5y ago
Whether I answer this question correctly or not will have significant financial consequences for me, so I'm trying to be as fair and balanced as possible.

DavideNL 5y ago

> The way I look at it, Bitcoin is my data (aka value) and eth is my computer (aka financial transaction platform), I switch computers every other year, but my data comes along with me. Is Bitcoin the data, or is it the harddrive? Because i switch harddrives every other 5 years too...