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As most Bitcoin advocates would say Zoom Out. Yes Bitcoin looks volatile if you look at the past 2-3 months. However if you zoom out to 1 year Bitcoin is still

by lowkey 5y ago

As most Bitcoin advocates would say Zoom Out. Yes Bitcoin looks volatile if you look at the past 2-3 months. However if you zoom out to 1 year Bitcoin is still up almost 300% y/y. Zoom out 2-3 years and the numbers look even better. As for USD, depending on what you want to buy inflation is 3-30% y/y - think asset price inflation. Zoom out further and USD looks even less attractive as a store of value. In 1933 $20usd bought 1oz of gold. Today it would take $2000usd/oz of gold, netting out to a 100x decrease in purchasing power in ~90 years. Bitcoin meanwhile has grown in purchasing power by 200% per year on average since inception. What El Salvador has done is brilliant. Citizens can chose between a short-term stable unit of account that loses most of its value over a long time period (USD) or a short-term volatile but long term deflationary currency designed to increase purchasing power over the long-term (BTC). Remember that no traditional bank in the world will ever again pay you sufficient interest on savings to preserve your purchasing power over time - not one. Fiat is a terrible long-term store of value. Bitcoin gives users the option to fix this.

verall 5y ago
The point of a fiat is that it slowly loses value, so wealth holders can't get bigger and bigger just by holding the fiat, they are forced to invest to break even. Bitcoin is not "fixing" anything here, a currency that deflates forever is a dumb idea.
- lowkey 5y ago
  So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Risk their principal? The only ones who benefit from inflationary fiat currencies are those closest to the new spending - via the Cantillon effect - namely bankers, politicians and their friends in the military industrial complex.
  - dragonwriter 5y ago
    > So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value, but even those that are good at this are extremely volatile assets, much more so than, say, blue-chip stocks. So they certainly don’t solve any problem of “you need exposure to volatile assets to not lose value of savings” that you might imagine exists. > Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Rick their principal? People without surplus income have no way to save by definition, with or without risking their income. That people with surplus income need to participate in wealth generation to recurve additional wealth from storage of their surplus income is obviously a feature.
    - lowkey 5y ago
      > Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value This is a straw man. The argument was not for some cryptocurrency. It was for Bitcoin. Bitcoin alone has the potential to become the reserve currency of the internet. It is the only crypto designed from the ground up to withstand attacks from nation states. Bitcoin is the scarcest asset ever created. It is the most decentralized and censorship resistant, and it is secured by the most powerful super-computer in the world. Therefore it isn't just about past performance, but rather past performance combined with a fundamental analysis of the unique properties of Bitcoin that make it the best performing asset in the history of assets over it's lifetime. Bitcoin is a unique snowflake. If you cannot tell the difference between Bitcoin and other cryptos you ARE missing the point. > People without surplus income have no way to save by definition Poor or rich, most people can find a way to save some of their income for the future. It may not be much to you but giving them the option to access a store of value that grows on average at 200% per year is a revolution for these folks who often have fewer options to grow savings. You are cherry-picking poor people to suit your argument. Not all poor people have zero surplus income. Some simply have too little or too insecure surplus income to escape their plight. I for one applaud giving these people more choices for a better life.
jmcqk6 5y ago
>As most Bitcoin advocates would say Zoom Out. Yes Bitcoin looks volatile if you look at the past 2-3 months. However if you zoom out to 1 year Bitcoin is still up almost 300% y/y. Either you don't understand what volatility means, or you think volatility only matters when it's towards the down position. Either way, you're wrong. Volatility in a currency is not a good thing. Even if some people are making money, other people are losing money due to the volatility. Value stability should be one of the top goals for any currency.
- lowkey 5y ago
  A currency that constantly loses value in terms of purchasing power over time is not stable. Again, zoom out and the picture looks different. The US Dollar loses approximately 100% of it’s value per century. Bitcoin maintains or increases its purchasing power by many orders of magnitude per decade. While the market rate on offer for Bitcoin at a given moment fluctuates, sometimes wildly, over a multi-year period the value always tends to go up. This is by design as Bitcoin is the scarcest asset ever invented - giving it the property of hard money which unlike fiat is immune from debasement. > Value stability should be one of the top goals for any currency. Per my comment above the US dollar’s value is not stable. It falls by ~100% per century and because of the Fed’s 80 year long policy of continuous debasement the value of US dollars will never be stable over time and will always go down. By contrast, while Bitcoin is volatile today, as it matures in its price discovery Bitcoin is likely to become more and more stable (read less volatile) in the future.

by lowkey 5y ago

verall 5y ago

The point of a fiat is that it slowly loses value, so wealth holders can't get bigger and bigger just by holding the fiat, they are forced to invest to break even. Bitcoin is not "fixing" anything here, a currency that deflates forever is a dumb idea.

lowkey 5y ago
So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Risk their principal? The only ones who benefit from inflationary fiat currencies are those closest to the new spending - via the Cantillon effect - namely bankers, politicians and their friends in the military industrial complex.
- dragonwriter 5y ago
  > So you consider it a feature of fiat that it is impossible for a saver to maintain their purchasing power over time unless they risk their capital on volatile assets such as stocks or real estate? Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value, but even those that are good at this are extremely volatile assets, much more so than, say, blue-chip stocks. So they certainly don’t solve any problem of “you need exposure to volatile assets to not lose value of savings” that you might imagine exists. > Why is is a good thing that widows, orphans, those living in poverty or on a fixed income have no way to save without having to Rick their principal? People without surplus income have no way to save by definition, with or without risking their income. That people with surplus income need to participate in wealth generation to recurve additional wealth from storage of their surplus income is obviously a feature.
  - lowkey 5y ago
    > Some cryptocurrencies may (in some cases, based on past performance) be good on average as long term stores of value This is a straw man. The argument was not for some cryptocurrency. It was for Bitcoin. Bitcoin alone has the potential to become the reserve currency of the internet. It is the only crypto designed from the ground up to withstand attacks from nation states. Bitcoin is the scarcest asset ever created. It is the most decentralized and censorship resistant, and it is secured by the most powerful super-computer in the world. Therefore it isn't just about past performance, but rather past performance combined with a fundamental analysis of the unique properties of Bitcoin that make it the best performing asset in the history of assets over it's lifetime. Bitcoin is a unique snowflake. If you cannot tell the difference between Bitcoin and other cryptos you ARE missing the point. > People without surplus income have no way to save by definition Poor or rich, most people can find a way to save some of their income for the future. It may not be much to you but giving them the option to access a store of value that grows on average at 200% per year is a revolution for these folks who often have fewer options to grow savings. You are cherry-picking poor people to suit your argument. Not all poor people have zero surplus income. Some simply have too little or too insecure surplus income to escape their plight. I for one applaud giving these people more choices for a better life.

jmcqk6 5y ago

>As most Bitcoin advocates would say Zoom Out. Yes Bitcoin looks volatile if you look at the past 2-3 months. However if you zoom out to 1 year Bitcoin is still up almost 300% y/y. Either you don't understand what volatility means, or you think volatility only matters when it's towards the down position. Either way, you're wrong. Volatility in a currency is not a good thing. Even if some people are making money, other people are losing money due to the volatility. Value stability should be one of the top goals for any currency.

lowkey 5y ago
A currency that constantly loses value in terms of purchasing power over time is not stable. Again, zoom out and the picture looks different. The US Dollar loses approximately 100% of it’s value per century. Bitcoin maintains or increases its purchasing power by many orders of magnitude per decade. While the market rate on offer for Bitcoin at a given moment fluctuates, sometimes wildly, over a multi-year period the value always tends to go up. This is by design as Bitcoin is the scarcest asset ever invented - giving it the property of hard money which unlike fiat is immune from debasement. > Value stability should be one of the top goals for any currency. Per my comment above the US dollar’s value is not stable. It falls by ~100% per century and because of the Fed’s 80 year long policy of continuous debasement the value of US dollars will never be stable over time and will always go down. By contrast, while Bitcoin is volatile today, as it matures in its price discovery Bitcoin is likely to become more and more stable (read less volatile) in the future.