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I think your time horizon is just too short. Fiat currencies weaken and die because of counter party risk. Governments can't help but abuse their powers and ev

I think your time horizon is just too short. Fiat currencies weaken and die because of counter party risk. Governments can't help but abuse their powers and eventually kill their currency. Bitcoin has an entirely new and unique value proposition: A monetary network with no counter party risk without the need to physically transport a good (like gold). The implications of this are mind bending. We're seeing something we've never seen before: the bootstrapping of an entirely new monetary system from the ground up with an asset and network that didn't previously exist. The path is laid out: 1) Store of value: We're still working our way through this phase. There is still a lot of monetary value left to gobble up. 2) Medium of exchange: People will horde this asset until other monies become so weak in comparison that merchants will prefer/demand payment in this one. 3) Unit of account: People become so used to transacting in a money they start to think in terms of that money. At this point, volatility gets measured in terms of this asset, not the other way around. Some goods are stores of value but will never reach the second stage, because they're not good monetary assets. Real estate, for example, or stocks. Not divisible, fungible, neutral, etc. Bitcoin has all of the ingredients, we just need to wait for the stew to cook. There are only a few things that can stop it, and none of them seem particularly likely to me. edit: I don't want to be dismissive. Private key management and things like that are certainly challenges, but it's just a matter of time, experimentation and UX improvements. It's not existential.

hiq 4y ago
> Governments can't help but abuse their powers and eventually kill their currency. This is an argument against USD as some kind of eternal international currency, not against RMB / EUR or another fiat currency replacing it (instead of BTC). It's debatable whether your 1) is happening at all, depending on definitions; most BTC transactions seem to boil down to speculation. Some users do "store value", as in, they buy and hold thinking it can still go way higher (or at least won't go lower) than it currently is with a reasoning similar to yours. But given the correlation with tech stocks as we wrote before, it remains to be seen if these users can go through a financial crisis with this mentality. Regarding 2), what do you mean by weak? The absolute value of a currency doesn't matter as long as it doesn't change too rapidly. If you need to pay $100 in a month and have some confidence about what this will represent by then, you don't need to know more, buyers and sellers can agree on a price. As long as merchants need to pay their taxes and other things in a fiat currency, you still have a bootstrapping problem with BTC. > Some goods are stores of value but will never reach the second stage, because they're not good monetary assets. Why is BTC a "good monetary asset"? I can buy ETFs representing commodities in liquid markets, why is that strictly worse? E.g. for whom is the "neutral" aspect of BTC a selling point? > There are only a few things that can stop it, and none of them seem particularly likely to me. I don't think BTC will ever go away, but I also don't see it becoming much more widespread outside of speculative circles. > Bitcoin has all of the ingredients, we just need to wait for the stew to cook. There are only a few things that can stop it, and none of them seem particularly likely to me. One problem in this space is how discussions remain both static and hopeful. I had the exact same discussions in 2017, it's been 5 years. The 10000 BTC pizza was bought in 2010, and yet 12 years after there's almost nothing I buy that I could have spent BTC on. If you ask me to do something, and I tell you I'm working on it whenever you ask me for a status update, how long do you keep believing? We can't prove that BTC will never be $SOMETHING. But until I actually find someone using BTC for something other than speculation or bypassing regulations, I'll have to remain skeptical.
dragonwriter 4y ago
> Governments can't help but abuse their powers and eventually kill their currency. That seems pretty nonfalsifiable.

hiq 4y ago

> Governments can't help but abuse their powers and eventually kill their currency. This is an argument against USD as some kind of eternal international currency, not against RMB / EUR or another fiat currency replacing it (instead of BTC). It's debatable whether your 1) is happening at all, depending on definitions; most BTC transactions seem to boil down to speculation. Some users do "store value", as in, they buy and hold thinking it can still go way higher (or at least won't go lower) than it currently is with a reasoning similar to yours. But given the correlation with tech stocks as we wrote before, it remains to be seen if these users can go through a financial crisis with this mentality. Regarding 2), what do you mean by weak? The absolute value of a currency doesn't matter as long as it doesn't change too rapidly. If you need to pay $100 in a month and have some confidence about what this will represent by then, you don't need to know more, buyers and sellers can agree on a price. As long as merchants need to pay their taxes and other things in a fiat currency, you still have a bootstrapping problem with BTC. > Some goods are stores of value but will never reach the second stage, because they're not good monetary assets. Why is BTC a "good monetary asset"? I can buy ETFs representing commodities in liquid markets, why is that strictly worse? E.g. for whom is the "neutral" aspect of BTC a selling point? > There are only a few things that can stop it, and none of them seem particularly likely to me. I don't think BTC will ever go away, but I also don't see it becoming much more widespread outside of speculative circles. > Bitcoin has all of the ingredients, we just need to wait for the stew to cook. There are only a few things that can stop it, and none of them seem particularly likely to me. One problem in this space is how discussions remain both static and hopeful. I had the exact same discussions in 2017, it's been 5 years. The 10000 BTC pizza was bought in 2010, and yet 12 years after there's almost nothing I buy that I could have spent BTC on. If you ask me to do something, and I tell you I'm working on it whenever you ask me for a status update, how long do you keep believing? We can't prove that BTC will never be $SOMETHING. But until I actually find someone using BTC for something other than speculation or bypassing regulations, I'll have to remain skeptical.

dragonwriter 4y ago

> Governments can't help but abuse their powers and eventually kill their currency. That seems pretty nonfalsifiable.