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What I'm always missing from the discussion around bitcoin and its price is: what are reasonable KPI's to measure its success, its impact, its utility etc. Whe

What I'm always missing from the discussion around bitcoin and its price is: what are reasonable KPI's to measure its success, its impact, its utility etc. When you want to value an organisation or company, it makes sense to look at these KPIs. They could be purely financial, e.g. profits, revenue, margins. Or they could be more fundamental, number of users, or rather, number of times a person has benefitted (e.g. # of one-night stands or relationships that Tinder generated). What are these KPIs or metrics for bitcoin, that can tell us it has value, beyond the speculative? When I invested in bitcoin in 2013, there was a lot of work to get user-adoption. It was seen as the way forward, also to create a return on your investment. we used to track numbers on # of wallets, # of daily transactions, # of merchants accepting bitcoin, # of volume on exchanges. Over time it began harder to differentiate true numbers from fake numbers, e.g. exchanges became notorious for faking transaction volume as a marketing tool. But overal, the general idea was that after 2015 or so, the number of real-world transactions and active (non-zero volume) merchants either declined, or in later years at least was not growing at remotely the same rates as the price of bitcoin. Whereas I used to use bitcoin for various things and saw others do it, too, today I can hardly point to a single person or company which has utilised bitcoin in a way that isn't speculative. There's no positive KPI or metric that I can point to, except speculative ones (e.g. price). If I survey my friends, the only reason they give to buy bitcoin, is that there's an expectation the price will keep going up. Yet, the work on user-adoption of bitcoin (i.e., real-world usage, not merely investing) seems like it's not at all part of anyone's calculus. That's the reason I sold all my bitcoin some time ago. Although I would not at all be surprised that the price will keep growing, I can forgive myself and justify me having sold. But if the price falls it'd be entirely reasonable, and I wouldn't be able to justify my choice not to sell. There is obvious real technology here in having a database/ledger that's not under control of 1 centralised party. But a decade later I'm not seeing anyone exploit that value outside of the speculative investment side. Btw, I believe there's potential long-term value in bitcoin merely as a store of value, a digital gold. But right now there's still a pretense of something more. Second, the store of value ideal only applies to one coin, not the trillion other crypto variants. And it requires trust and faith (over decades/centuries) in one particular fork of Bitcoin. There's only one chemical that's pure gold, but one could create infinitely many bitcoin forks.

jerf 5y ago
What do you consider the KPIs of the US Dollar? Not intended as a gotcha, I'm curious what you mean by it and examples seem a reasonable way to find out.
- rjzzleep 5y ago
  A chokehold on international payment remittance. Every single USD transaction in Taiwan passes through a US bank. A handful of countries are organizing their own crosscountry remittance systems. Until then, the US can effectively cut any country off international transactions when they feel like it.
  - GoblinSlayer 5y ago
    >A handful of countries are organizing their own crosscountry remittance systems. USA can just bomb them into the approved currency.
- IkmoIkmo 5y ago
  Accepted and used in 99% of every real-world transactions by the biggest economy in the world, used by 99% of the merchants and 99% of the citizens in this economy. But I'd say that perhaps it's not the best comparison. Few people are looking to purchase dollars for the sake of holding them as an investment. There's of course tons of volume on Forex markets for hedging and speculation, but regular citizens aren't looking to purchase dollars for investments, i.e. in order to generate a return on dollars-held. Typically people use dollars as a medium of exchange and the way in which prices are commonly expressed. But anyone with sufficient dollars will want to use them to hold assets, whether they're a home, stocks, or simply low-risk treasury bonds, the idea is that dollars give access to these assets, but few are looking to simply buy and hold as many dollaras as they can in order to generate some kind of a return. Bitcoin is also a technology in a way that the dollar isn't. The dollar is an idea, backed up by lots of different technologies both analog or digital. Those technologies don't necessarily have much to do with the price of the dollar. Nor do dollars have to have a certain price for them to be used, in a way that for many years, people expected individual bitcoins to be value (and thus naturally to go up in price as demand for these tokens went up) because the tokens would be used in various technological applications... That hasn't materialised, which makes the increasing value of the tokens somewhat non-sensical.

jerf 5y ago

What do you consider the KPIs of the US Dollar? Not intended as a gotcha, I'm curious what you mean by it and examples seem a reasonable way to find out.

rjzzleep 5y ago
A chokehold on international payment remittance. Every single USD transaction in Taiwan passes through a US bank. A handful of countries are organizing their own crosscountry remittance systems. Until then, the US can effectively cut any country off international transactions when they feel like it.
- GoblinSlayer 5y ago
  >A handful of countries are organizing their own crosscountry remittance systems. USA can just bomb them into the approved currency.
IkmoIkmo 5y ago
Accepted and used in 99% of every real-world transactions by the biggest economy in the world, used by 99% of the merchants and 99% of the citizens in this economy. But I'd say that perhaps it's not the best comparison. Few people are looking to purchase dollars for the sake of holding them as an investment. There's of course tons of volume on Forex markets for hedging and speculation, but regular citizens aren't looking to purchase dollars for investments, i.e. in order to generate a return on dollars-held. Typically people use dollars as a medium of exchange and the way in which prices are commonly expressed. But anyone with sufficient dollars will want to use them to hold assets, whether they're a home, stocks, or simply low-risk treasury bonds, the idea is that dollars give access to these assets, but few are looking to simply buy and hold as many dollaras as they can in order to generate some kind of a return. Bitcoin is also a technology in a way that the dollar isn't. The dollar is an idea, backed up by lots of different technologies both analog or digital. Those technologies don't necessarily have much to do with the price of the dollar. Nor do dollars have to have a certain price for them to be used, in a way that for many years, people expected individual bitcoins to be value (and thus naturally to go up in price as demand for these tokens went up) because the tokens would be used in various technological applications... That hasn't materialised, which makes the increasing value of the tokens somewhat non-sensical.