6 ms·

The idea of Bitcoin is that no one has the power to issue currency. Issuance is limited to 21 million units and all of them are created with energy. No one shou

by Geee 5y ago

The idea of Bitcoin is that no one has the power to issue currency. Issuance is limited to 21 million units and all of them are created with energy. No one should have the power to issue currency.

hhmc 5y ago
Bitcoin has an annualized volatility of around 100% In what sense can it be a useful currency?
- Geee 5y ago
  Volatility is not an inherent property of a currency or an asset, but the result of market actions. Volatility will decrease in the long term, when more uncorrelated markets are traded in bitcoin. Eventually, when everything is traded and priced in bitcoin, bitcoin becomes an objective unit of value. At that point bitcoin is the only thing that is not volatile, and volatility of everything else is measured against it.
  - thehappypm 5y ago
    So your argument is that right now, the value of 1 Bitcoin is volatile, when compared to things like dollars or apples. In the future, the perspective will flip, and 1 Bitcoin will be considered stable, and the value of apples will be what is considered volatile?
    - Geee 5y ago
      Yes. At that point, the volatility of bitcoin will be the average volatility of everything.
      - thehappypm 5y ago
        This is one of the more bizarre/interesting predictions I've seen so far.
  - hhmc 5y ago
    > Volatility is not an inherent property of a currency or an asset Volatility is an an inherent property of an asset/currency/whatever(stddev of (log)returns), as long as you have a fixed and distinct numeraire. Sure, you can argue that bitcoin may _be_ the numeraire one day, but what's the path towards that when it's so useless as a currency presently?
    - Geee 5y ago
      It's not useless even if it is volatile. On longer time scales, it is not volatile but consistently appreciating in value, which makes it a great savings vehicle. It's inherently a better currency, and that's why more and more people choose to use it. Increased use decreases volatility, which in turn makes it more attractive as a currency, and so on.
      - arrrgr 5y ago
        Yeah, let's just forget about the fact that every BTC up move was preceded by a fat Tether print since mid 2016. It's not Tether pumping, it's the people choosing bitcoin! derp
        Geee 5y ago
        The amount of Tether just tracks the amount of money deposits, which are tokenized into USDT. Tether is just a small fraction of all the money entering exchanges.
        RhodoGSA 5y ago
        Big crypto guy here; Tether is the bain of crypto. It is a centralized medium, that is accepted on centralized exchanges as fact with no audit on how much asset to coin ratio exists. Tether can print as many USDT as they want, buy up all the BTC on 100x leveraged long and no one would be the wiser. BTC's $700B market cap could be fairy dust and no one can know.
        5y ago
haskellandchill 5y ago
Do you not see the glaring inconsistency in your statements? "No one has power to issue currency! Bitcoin is issued currency!"
- Geee 5y ago
  21 million units of bitcoin have already been issued by the Bitcoin network itself. All the issued bitcoin are released as block rewards equally to anyone who wants to mine them according to the network rules, and all the miners must use energy to pay for them. No one gets them for free or has power to issue more. Bitcoin is similar to gold in this regard, with the difference that the total amount of gold is practically unlimited and gold is mined with an unpredictable schedule.

by Geee 5y ago

The idea of Bitcoin is that no one has the power to issue currency. Issuance is limited to 21 million units and all of them are created with energy. No one should have the power to issue currency.

hhmc 5y ago

Bitcoin has an annualized volatility of around 100% In what sense can it be a useful currency?

Geee 5y ago
Volatility is not an inherent property of a currency or an asset, but the result of market actions. Volatility will decrease in the long term, when more uncorrelated markets are traded in bitcoin. Eventually, when everything is traded and priced in bitcoin, bitcoin becomes an objective unit of value. At that point bitcoin is the only thing that is not volatile, and volatility of everything else is measured against it.
- thehappypm 5y ago
  So your argument is that right now, the value of 1 Bitcoin is volatile, when compared to things like dollars or apples. In the future, the perspective will flip, and 1 Bitcoin will be considered stable, and the value of apples will be what is considered volatile?
  - Geee 5y ago
    Yes. At that point, the volatility of bitcoin will be the average volatility of everything.
    - thehappypm 5y ago
      This is one of the more bizarre/interesting predictions I've seen so far.
- hhmc 5y ago
  > Volatility is not an inherent property of a currency or an asset Volatility is an an inherent property of an asset/currency/whatever(stddev of (log)returns), as long as you have a fixed and distinct numeraire. Sure, you can argue that bitcoin may _be_ the numeraire one day, but what's the path towards that when it's so useless as a currency presently?
  - Geee 5y ago
    It's not useless even if it is volatile. On longer time scales, it is not volatile but consistently appreciating in value, which makes it a great savings vehicle. It's inherently a better currency, and that's why more and more people choose to use it. Increased use decreases volatility, which in turn makes it more attractive as a currency, and so on.
    - arrrgr 5y ago
      Yeah, let's just forget about the fact that every BTC up move was preceded by a fat Tether print since mid 2016. It's not Tether pumping, it's the people choosing bitcoin! derp
      - Geee 5y ago
        The amount of Tether just tracks the amount of money deposits, which are tokenized into USDT. Tether is just a small fraction of all the money entering exchanges.
        RhodoGSA 5y ago
        Big crypto guy here; Tether is the bain of crypto. It is a centralized medium, that is accepted on centralized exchanges as fact with no audit on how much asset to coin ratio exists. Tether can print as many USDT as they want, buy up all the BTC on 100x leveraged long and no one would be the wiser. BTC's $700B market cap could be fairy dust and no one can know.
        5y ago

haskellandchill 5y ago

Do you not see the glaring inconsistency in your statements? "No one has power to issue currency! Bitcoin is issued currency!"

Geee 5y ago
21 million units of bitcoin have already been issued by the Bitcoin network itself. All the issued bitcoin are released as block rewards equally to anyone who wants to mine them according to the network rules, and all the miners must use energy to pay for them. No one gets them for free or has power to issue more. Bitcoin is similar to gold in this regard, with the difference that the total amount of gold is practically unlimited and gold is mined with an unpredictable schedule.