6 ms·

if any entity - private or government - was interested in accumulating an asset, which sane and rational person would accumulate something as volatile as a cryp

if any entity - private or government - was interested in accumulating an asset, which sane and rational person would accumulate something as volatile as a cryptocurrency? As a store of value, it is pathetically bad and its vulnerabilities are very easy to exploit.

svenpor 5y ago
I agree. It'd be necessary to assign prices and balances as probability distributions.
alfl 5y ago
Volatile by what measure over what time period? If a country, for example, is looking at price-versus-USD on a rolling average over five years and measuring volatility in terms of (positive and negative) variance of price, then the trend line is up-right* and volatility is very low. [Edit: * was up-left, mistakenly.]
- nicbou 5y ago
  Volatility of bitcoin is low relative to USD?
  - jksmith 5y ago
    You want volatile value trending up, or or value going to shit with certainty?
    - hiq 5y ago
      For a currency you're better off with more certainty, e.g. a 2% constant yearly inflation is ideal and allows people to use it as a currency. BTC is also currently down from its peak, no one knows if it's currently "trending up".
      - jksmith 5y ago
        That's way off the mark with regard to purchasing power vs money supply. Check your M2 chart. And your time frame on BTC is too short. Yes, it's trending up, and also becoming less volatile over time.
        hiq 5y ago
        > That's way off the mark with regard to purchasing power vs money supply. Check your M2 chart. Not sure what you're disagreeing with. Point is, if I can't predict reasonably well what I'll be able to buy in a few months with the currency I'm using, maybe what I'm using is not meant to be a currency. > And your time frame on BTC is too short. Yes, it's trending up, and also becoming less volatile over time. I'm sure I can find a time frame over which BTC is up. Not sure that helps much. It's "trending down" since August 2021. It's "trending up" over the last 10 years. What comes next is anyone's guess. Regarding volatility, whenever I look at it, all the sources I can find point to some volatility being at least constant over the past few years (I linked a source in another comment which indicates sustained volatility over the last 7 years). I've seen 3 different ones so far. Do you have one that would indicate otherwise? I could find one[0] but it's pretty bad, it starts with the yearly chart showing that the volatility is not declining, then shows a daily one over 7 days and shows a decline over this period. [0]: https://medium.com/@silvestrimichela.s/is-btc-volatility-going-down-66153fedbfed https://medium.com/@silvestrimichela.s/is-btc-volatility-goi...
        eric-hu 5y ago
        I’m not the person you asked, but your previous post mentioned constant, predictable inflation and threw out 2% as an example. I understand that was just a number for illustrative purposes, but the US performances large amounts of quantitative easing twice in the last 20 years. I could probably find a 4 year window in the last 20 years when it didn’t, but the Covid and 2009 QE events increased the m2 money supply so much that it would be silly to ignore.
        hiq 5y ago
    - nicbou 5y ago
      That makes no sense. I ask a question and you just answer with a non sequitur that doesn't address anything.
- SantalBlush 5y ago
  Or to put it more simply, stonks go up.
  - jksmith 5y ago
    Yes, crashing up.
    - bannedbybros 5y ago
ludamad 5y ago
The volatility in price seems okay as far as diversification, there was some low probability of crypto prices being this high and it happened. The private key hygiene is really worrying though. You can have private key multisig but at some basic level the funds can just disappear once someone accumulates enough keys (e.g. corrupt persons sell them on black market). Or be lost if enough keys are lost etc. It requires pretty diligent process, especially during changes of power
- jjoonathan 5y ago
  How is bitcoin diversification when it correlates so strongly with the stock market?
  - ludamad 5y ago
    Not trying to make a strong statement but obviously correlation in moves doesn't mean it's been pegged to SPY. If they could have a digital asset pegged to SPY, maybe it'd be attractive, as well
- deleted 5y ago
  [deleted]
rufusroflpunch 5y ago
Store of value depends on the time frame. Bitcoin has a four year halving cycle (the supply issuance halves every four years). If you look at the 200WMA (weekly moving average), which is roughly 4 years, it's a steady march upward. So as long as your time horizon is 4+ years, it's the best savings technology you could ask for. In terms of the USD, the price of Bitcoin is volatile in the short term. But that volatility is due to its relatively small size compared to its total addressable market. The total addressable market of Bitcoin is all monetary value on earth, so in the hundreds of trillions, probably. Bitcoin's network effects have already likely reached "runaway" status, so Bitcoin will continue to grow as the network effect speeds up exponentially. Its volatility will continue decreasing as it grows to address more of the T.A.M. of global monetary value.
- midislack 5y ago
  >So as long as your time horizon is 4+ years, it's the best savings technology you could ask for. My US Hay, Confederated Slaveholdings, and buggy whip stocks were shooting up for a long time, they must still be great investments.
  - rufusroflpunch 5y ago
    Bitcoin isn't a stock. It has no counter party risk and doesn't offer returns. It is a monetary good. It's akin to holding a commodity metal like gold or silver, but it has comparative advantage in that it has no competing utility, it is only useful as a money.
    - midislack 5y ago
      It's not a monetary good. It's a virtual scrip with mathematical basis.
- hiq 5y ago
  > Bitcoin has a four year halving cycle This misses the whole picture which is about both supply and demand, and mining is only one side of the equation. You do mention demand afterwards, but > Bitcoin's network effects have already likely reached "runaway" status, so Bitcoin will continue to grow as the network effect speeds up exponentially. is debatable to say the least. Is there any legal niche group that would use it for at least 50% of their transactions? News articles about the experiment in El Salvador seem to indicate that people still prefer to use cash (USD). > The total addressable market of Bitcoin is all monetary value on earth, so in the hundreds of trillions, probably. Not sure how this is relevant, in practice 99% of the world can use the USD one way or another, but that doesn't mean it'll ever reach this point. > Its volatility will continue decreasing as it grows to address more of the T.A.M. of global monetary value. Has it even begun? I haven't computed anything myself, but whenever I look for sources I end up with figures that contradict this claim, e.g.: https://www.buybitcoinworldwide.com/volatility-index/ https://www.buybitcoinworldwide.com/volatility-index/ If you look at the past 7 years, it doesn't look like it has gone down. I had seen tables with yearly volatility averages (or whatever the measure was) claiming the same. Do you have a better source than this?

svenpor 5y ago

I agree. It'd be necessary to assign prices and balances as probability distributions.

alfl 5y ago

Volatile by what measure over what time period? If a country, for example, is looking at price-versus-USD on a rolling average over five years and measuring volatility in terms of (positive and negative) variance of price, then the trend line is up-right* and volatility is very low. [Edit: * was up-left, mistakenly.]

nicbou 5y ago
Volatility of bitcoin is low relative to USD?
- jksmith 5y ago
  You want volatile value trending up, or or value going to shit with certainty?
  - hiq 5y ago
    For a currency you're better off with more certainty, e.g. a 2% constant yearly inflation is ideal and allows people to use it as a currency. BTC is also currently down from its peak, no one knows if it's currently "trending up".
    - jksmith 5y ago
      That's way off the mark with regard to purchasing power vs money supply. Check your M2 chart. And your time frame on BTC is too short. Yes, it's trending up, and also becoming less volatile over time.
      - hiq 5y ago
        > That's way off the mark with regard to purchasing power vs money supply. Check your M2 chart. Not sure what you're disagreeing with. Point is, if I can't predict reasonably well what I'll be able to buy in a few months with the currency I'm using, maybe what I'm using is not meant to be a currency. > And your time frame on BTC is too short. Yes, it's trending up, and also becoming less volatile over time. I'm sure I can find a time frame over which BTC is up. Not sure that helps much. It's "trending down" since August 2021. It's "trending up" over the last 10 years. What comes next is anyone's guess. Regarding volatility, whenever I look at it, all the sources I can find point to some volatility being at least constant over the past few years (I linked a source in another comment which indicates sustained volatility over the last 7 years). I've seen 3 different ones so far. Do you have one that would indicate otherwise? I could find one[0] but it's pretty bad, it starts with the yearly chart showing that the volatility is not declining, then shows a daily one over 7 days and shows a decline over this period. [0]: https://medium.com/@silvestrimichela.s/is-btc-volatility-going-down-66153fedbfed https://medium.com/@silvestrimichela.s/is-btc-volatility-goi...
        eric-hu 5y ago
        I’m not the person you asked, but your previous post mentioned constant, predictable inflation and threw out 2% as an example. I understand that was just a number for illustrative purposes, but the US performances large amounts of quantitative easing twice in the last 20 years. I could probably find a 4 year window in the last 20 years when it didn’t, but the Covid and 2009 QE events increased the m2 money supply so much that it would be silly to ignore.
        hiq 5y ago
  - nicbou 5y ago
    That makes no sense. I ask a question and you just answer with a non sequitur that doesn't address anything.
SantalBlush 5y ago
Or to put it more simply, stonks go up.
- jksmith 5y ago
  Yes, crashing up.
  - bannedbybros 5y ago

ludamad 5y ago

The volatility in price seems okay as far as diversification, there was some low probability of crypto prices being this high and it happened. The private key hygiene is really worrying though. You can have private key multisig but at some basic level the funds can just disappear once someone accumulates enough keys (e.g. corrupt persons sell them on black market). Or be lost if enough keys are lost etc. It requires pretty diligent process, especially during changes of power

jjoonathan 5y ago
How is bitcoin diversification when it correlates so strongly with the stock market?
- ludamad 5y ago
  Not trying to make a strong statement but obviously correlation in moves doesn't mean it's been pegged to SPY. If they could have a digital asset pegged to SPY, maybe it'd be attractive, as well
deleted 5y ago
[deleted]

rufusroflpunch 5y ago

Store of value depends on the time frame. Bitcoin has a four year halving cycle (the supply issuance halves every four years). If you look at the 200WMA (weekly moving average), which is roughly 4 years, it's a steady march upward. So as long as your time horizon is 4+ years, it's the best savings technology you could ask for. In terms of the USD, the price of Bitcoin is volatile in the short term. But that volatility is due to its relatively small size compared to its total addressable market. The total addressable market of Bitcoin is all monetary value on earth, so in the hundreds of trillions, probably. Bitcoin's network effects have already likely reached "runaway" status, so Bitcoin will continue to grow as the network effect speeds up exponentially. Its volatility will continue decreasing as it grows to address more of the T.A.M. of global monetary value.

midislack 5y ago
>So as long as your time horizon is 4+ years, it's the best savings technology you could ask for. My US Hay, Confederated Slaveholdings, and buggy whip stocks were shooting up for a long time, they must still be great investments.
- rufusroflpunch 5y ago
  Bitcoin isn't a stock. It has no counter party risk and doesn't offer returns. It is a monetary good. It's akin to holding a commodity metal like gold or silver, but it has comparative advantage in that it has no competing utility, it is only useful as a money.
  - midislack 5y ago
    It's not a monetary good. It's a virtual scrip with mathematical basis.
hiq 5y ago
> Bitcoin has a four year halving cycle This misses the whole picture which is about both supply and demand, and mining is only one side of the equation. You do mention demand afterwards, but > Bitcoin's network effects have already likely reached "runaway" status, so Bitcoin will continue to grow as the network effect speeds up exponentially. is debatable to say the least. Is there any legal niche group that would use it for at least 50% of their transactions? News articles about the experiment in El Salvador seem to indicate that people still prefer to use cash (USD). > The total addressable market of Bitcoin is all monetary value on earth, so in the hundreds of trillions, probably. Not sure how this is relevant, in practice 99% of the world can use the USD one way or another, but that doesn't mean it'll ever reach this point. > Its volatility will continue decreasing as it grows to address more of the T.A.M. of global monetary value. Has it even begun? I haven't computed anything myself, but whenever I look for sources I end up with figures that contradict this claim, e.g.: https://www.buybitcoinworldwide.com/volatility-index/ https://www.buybitcoinworldwide.com/volatility-index/ If you look at the past 7 years, it doesn't look like it has gone down. I had seen tables with yearly volatility averages (or whatever the measure was) claiming the same. Do you have a better source than this?