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The Bitcoin Investment Thesis Is Broken

115 points by RickJWagner 4y ago

jqpabc123 4y ago
The Bitcoin speculation thesis will live on --- proving that new suckers are born every minute.
- danuker 4y ago
  Or maybe, just maybe, that more fiat liquidity is created every minute.
turtledove 4y ago
> The conclusion: it’s over. In two or three years, people won’t even talk about crypto. One hopes.
- zhoujianfu 4y ago
  https://www.bitcoinisdead.org/ https://www.bitcoinisdead.org/
sudden_dystopia 4y ago
You didn’t call a bubble…we are in a recession. If you want to continue living with a continually debased fiat currency, that’s your choice. But don’t shit on people that are trying to circumvent the authoritarian control on the monetary system. Yes, I understand that most crypto is a scam. I do think BTC can possibly be different.
- boplicity 4y ago
  Imagine if the U.S. dollar lost 3/4 of its value in a single year, and regularly doubled (and halved) in value. That's the reality of Bitcoin -- anything else is a fantasy, or, at best, a naive hope.
  - PKop 4y ago
    >regularly doubled and halved This is why it's not even close to dead and will continue to get flows of liquidity during boom cycles, because many others also see this regularity you've identified.
  - marketneutral 4y ago
    check out the charts of SNAP (just this morning), AMZN, NFLX, TSLA, FB, GOOG, do you have the same criticisms for the biggest equities in the US stock market?
    - spamizbad 4y ago
      Apples and oranges. Stocks serve a radically different role than currency. But you are very right about one thing: cryptocurrency behaves a lot like a tech stock.
    - buzzdenver 4y ago
      Those are equity, not currency. There is a reason why employees of those companies get paid in local currency, and not company stock.
      - triceratops 4y ago
        Their employees get both local currency and company stock.
        buzzdenver 4y ago
        Majority being currency, unless the stock goes up a crazy crazy amount.
    - grumple 4y ago
      When's the last time a major index lost 50% of its value? - 2008 crash due to deregulation Does it happen every two years? - obviously not Are stocks intended to be currency? - no Stocks also are attached to real property - ownership in a revenue / profit generating company and their assets. Crypto is only a vehicle for speculation. A currency should not experience regular crashes or explosions of value. Assets are generally more volatile by their very nature.
- eropple 4y ago
  If you bet on Bitcoin because of a "debased fiat currency", you have likely lost a grievous amount of value in whatever denomination anyone other than you actually cares about. Meanwhile, you still can't use it to buy a sandwich and promises to the contrary are over five years old with no progress to speak of. It remains merely environmentally disastrous not-money. Gold buggery is eternal, though; I wonder if the elderly watching right-wing news channels are the next to be targeted with buy-it-now ads.
  - paystaxes 4y ago
    > If you bet on Bitcoin because of a "debased fiat currency", you have likely lost a grievous amount of value in whatever denomination anyone other than you actually cares about. My Venezuelan friends feel differently. > you still can't use it to buy a sandwich https://www.investing.com/news/cryptocurrency-news/walmart-mcdonalds-and-thousands-of-other-stores-to-accept-bitcoin-via-strikes-lightning-network-2800728 https://www.investing.com/news/cryptocurrency-news/walmart-m... >It remains merely environmentally disastrous https://www.coindesk.com/business/2021/03/05/the-frustrating-maddening-all-consuming-bitcoin-energy-debate/ https://www.coindesk.com/business/2021/03/05/the-frustrating...
throw__away7391 4y ago
> El Salvador will revert to using whatever worthless currency they had before Bitcoin. Um, the US dollar? (Not that I in any way shape or form support crypto just to be clear)
- pcthrowaway 4y ago
  Yeah, this line specifically made me really question how much thought the author put into this. Even just the assumption that "whatever else they were using is also worthless" says a lot about their willingness to jump to conclusions
- thesausageking 4y ago
  Yeh, that stood out to me too. If the author doesn't know that El Salvador uses the dollar and is embracing Bitcoin partly to decouple their economy from USD, then I question everything he says. One thesis for Bitcoin is that the global economy is transitioning away from the petrodollar system and Bitcoin may play a part in the reserve currencies that replace it. El Salvador just hosted a summit with 44 countries to discuss adopting Bitcoin as legal tender and moving to a new reserve system.
  - throw__away7391 4y ago
    > decouple their economy from USD You misspelled "attempt to cash grab by capitalizing on a silly trend"
- samatman 4y ago
  Nothing like taking a drive-by shit on developing countries to convince me of what a nice guy the author is.
5350-uiop-1130 4y ago
using underlines for emphasis and no underlines for links, great work.
- cj 4y ago
  I quite like when key parts of each paragraph is emphasized in some way. It makes skimming the article much easier / quicker. Similar to https://bionic-reading.com/ https://bionic-reading.com/ which was on HN recently, except at the sentence level instead of every word.
- rieTohgh6 4y ago
  Well that article is a waste of time even if it was properly formatted. Foe example "Failed Security Promises" sections talks about BTC and links to unrelated Solana bridge hack. There is nothing new or interesting, just snippets of random crypto bashing. I would love to see crypto and related buzzwords dead but this submission fails to convince me it is finally happening.
  - 5350-uiop-1130 4y ago
    yeah it's a naive take.
- AnonHP 4y ago
  That was annoying for me too. I kept tapping on the underlines to see if those were links, and found that they weren’t.
pavlov 4y ago
There have been numerous Bitcoin theses over the years and they’re all broken. Is it peer-to-peer digital cash like the original white paper claims? Clearly not, with slow settlement and high transaction costs. Is it an uncorrelated hedge against stock market volatility? No, it trades like leveraged Nasdaq. Is it a store of value based on [insert lurid fantasy about digital energy crystal magic on the blockchain]? No, see above. Is it a backbone for other, faster payment systems? No, see the miserable state of the Lightning Network after nearly a decade. Is it a system for remittances to the third world? No, see El Salvador’s experiment. Is it a way out of dollar dependency for third world governments? No, see El Salvador again. Is it a way for North Korea to get paid when extorting Western companies? In fact yes, this use case does seem to work.
- tootie 4y ago
  It's absolutely a pyramid scheme. But that doesn't mean it will actually collapse. A lot of the best known pyramid schemes (Amway, Mary Kay) ended being incredibly durable businesses where all the people who lost their shirts failed to dissuade the next generation.
  - eldenwrong 4y ago
    It's absolutely not. Go google the definition of a pyramid scheme
    - moron4hire 4y ago
      Not a convincing argument.
      - eldenwrong 4y ago
        To engage in rational discourse one has to a at least put minimum effort in the topic
        moron4hire 4y ago
eldenwrong 4y ago
- sdfhdhjdw3 4y ago
  I read this in a Spanish or Italian accent.
  - mat0 4y ago
    Why?
    - sdfhdhjdw3 4y ago
      That's my estimation of the commenter's first language, given his spelling mistakes.
- tootie 4y ago
  Did you read this post? If you bet on crypto as a hedge against inflation you lost very badly. The S&P is virtually guaranteed to recover its losses and will likely end up positive for the year. BTC and others we have no idea. This was the big test and it failed miserably.
  - eldenwrong 4y ago
    Love when IYIs make up random tests on short timeframe where Bitcoin constantly fails. When stock market speculators entered like sheep into Bitcoin it was obvious that the correlation with the stock market would increase.
    - tootie 4y ago
      It absolutely was not obvious. At least not to anyone who believed the mission statement. Read the post and tell me what is wrong. It's a bit coarse, but still accurate. BTC was created ostensibly as a privacy currency. A job it failed at by deflating wildly until it was utterly useless for simple transactions and became an investment asset. Amateurs saw it going up and wanted in, then it crashed much harder than every other investment class. It was supposedly an inflation hedge because it wasn't subject to central bankers, yet it lost value far faster than any fiat currency. What even is the current crash? There's no fundamentals like yields or P/E ratios to say that any crypto has gained or lost any intrinsic value. There's no equity voting rights. There's no index associated to it's purchasing power. There's no bonds denoted in any crypto value. It is driven entirely by sentiment. After the dotcom bust, it took the NASDAQ _17 years_ to fully recover to it's peak. Crypto investors are not going to wait that long.
PKop 4y ago
>Fed holdings went from $4T to $9T over the last ten years. >By contrast, the cumulative crypto complex grew from essentially $0 to $2T before its recent crash. Where did this money come from? It was essentially a money multiplier effect of QE. >Crypto is now collapsing because the Fed is tightening. Yes, and when the Fed reverses course after everything breaks from this tightening, BTC will rise again. Why are extreme boom and bust cycles of crypto surprising to anyone anymore? It is the asset most correlated change in global liquidity. And if the author thinks the liquidity spigot is forever cut off with this much global debt, he's got another think coming. The Fed balance sheet will be going to 15, 20, $30 trillion eventually. No entity has a big enough balance sheet to buy the enormous debt and deficits the US produces, and the Eurodollar market can't function without continued liquidity injections.
- onlyrealcuzzo 4y ago
  > Yes, and when the Fed reverses course after everything breaks from this tightening, BTC will rise again. Why are extreme boom and bust cycles of crypto surprising to anyone anymore? I wouldn't be so sure. The narrative for crypto was that interest rates were never going to go up, QE was never going to stop, and we were going to see hyper inflation. Somehow - crypto was uniquely the only possible hedge against this. This has proven to be false. It's at least going to need a new narrative. At some point, it's going to run out of narratives, and it's going to need to actually deliver value.
  - bradstewart 4y ago
    Despite all of the narratives you'd read on HN, I honestly don't think the majority of "regular" people who helped drive the boom needed any story beyond "look how fast it's going up!". Hell, I'm also guilty of falling for that at times. It can, and likely will, happen again.
    - onlyrealcuzzo 4y ago
      The "look how fast it's going up" needs a narrative to get going up in the first place...
marketneutral 4y ago
BTC is down 50% from ATH while Nasdaq is off 30% and S&P 20%, Bonds (AGG) down 15%, all in the span of 6 months. BTC's investment thesis is not invalidated for sliding along with every single other asset class in one of the worst historic starts to a year. Try a longer term perspective, and BTC is indeed still deflationary - its potential to replace central bank functionality and to be a secure, global SoV is still valuable to investors.
- notahacker 4y ago
  It's claimed ability to be a SoV is rather damaged by it falling more than other asset classes. If it was a more secure alternative to gold it should have headed in the other direction...
  - eldenwrong 4y ago
    Its on the path to become a SoV. You don't get there on a straight line...
    - pclmulqdq 4y ago
      It's been on that path for 15 years, when is it supposed to get there?
      - lampshades 4y ago
        Are you blind? It is getting there quick. 15 years is not a long time.
        pclmulqdq 4y ago
        In terms of tech innovations in the modern day, 15 years is an eternity. Google didn't take 15 years to become a massive search engine, FB didn't take 15 years to become the dominant social network. Bitcoin was supposed to have started acting counter-cyclically (like gold) when it got mass adoption. So, 2018? Instead, it acts like leveraged NASDAQ in its pricing, and has absolutely none of the utility that a cryptocurrency probably should have. The only benefit of bitcoin is name recognition. That doesn't create a currency or a store of value. The volatility of BTC/USD has only increased, as well as the correlation with QQQ, which does not suggest that BTC will ever become a store of value. All fundamental signs point to a $0 value for bitcoin. Unfortunately, the dinosaur coin (BTC) will probably drag down the coins with utility (eg Solana, Zcash, and Monero) with it.
deleted 4y ago
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rr808 4y ago
I have no need for bitcoin but looking at transaction costs, and the financial restrictions on citizens of many countries there is definitely a need for some kind of crypto currency. I can't see any other cc more trusted that BTC right now.
- namaria 4y ago
  The problem of transferring value around unjust restrictions is not solved by crypto tokens or the blockchain, it's solved by the money markets around these tokens at both ends of the transaction.
  - rr808 4y ago
    In Western countries yes, in many countries there are many legal restrictions.
Barrera 4y ago
There's so much wrong with this essay, it's hard to know were to start. And I'm not just talking about the Bitcoin part. Let's take this chestnut: > As the Fed printed more money, more crypto assets were created. The author is probably referring to Quantitative Easing. But QE is not "money printing." It is an asset swap in which the Fed issues a utility token called "bank reserves" in exchange for a treasury or mortgage backed security. Bank reserves can not be used outside of the Federal Reserve system. They can not be converted to "cash," nor can they be used to pay salaries, bonuses, etc. (They can be converted to treasuries through Quantitative Tightening). Bank reserves are not money. Therefore the fed printed no money. It did, however, do a lot of asset swaps, accumulating a bunch of treasuries and MBS, while issuing a lot of bank reserves. This is not a mainstream view, but it is supported by the evidence. If you try to find documentary evidence for the notion of the Fed money printer spinning new dollars into existence, you will find none. Even worse, some economist view QE as a restriction on money. By locking highly valuable collateral (treasuries) on the Fed balance sheet, the financial system is deprived of the stuff that keeps it going. You see this manifest itself with the nearly $2 trillion in reverse repo being done now. Because it's all most people care about, let's stick with the inflation hedge thing. > Now, that’s from an all time high but the point is that all time high came before evidence of inflation. Once the inflation arrived, BTC has gone only one direction – the wrong one. An asset class that correctly hedged against CPI acceleration (as separate from money printing) would show exactly this behavior. A bull market prior to the appearance of CPI acceleration. Then, when the peak is reached, the hedge loses steam and retraces some of the gains. This behavior is sometimes called "buy the rumor sell the news." I can see how it might be irritating to separate CPI acceleration from money printing, but this is the conundrum you must resolve for yourself in today's world. I'm not saying that Bitcoin is a hedge against "inflation." I'm just saying that the authors statements and conclusions aren't the only explanations for the price behavior of Bitcoin. There are many confounding factors under the surface.
- spupe 4y ago
  There were several other mistakes there, but the most annoying to me was this hand-waving between correlation and causation. Sure, crypto boomed during a period of intense QE. There were also unprecedented cash payments for everyone and a big supply shock. I think the author's analysis of the relationship between inflation and BTC was equally dumb, simply noticing an inverse correlation. I'm totally not a crypto apologist btw, just pointing out inaccuracies.
lgrapenthin 4y ago
> If there were ever a time for BTC to be going parabolic, it would have been over the last year. What happened? It went down by half. > Now, that’s from an all time high but the point is that all time high came before evidence of inflation. Evidence of inflation came before Bitcoins existence. "but the point is" ... very fabricated.
ryandvm 4y ago
Bitcoin as an investment always struck me as a rather silly idea. Bitcoin was supposed to be useful because it was a decentralized currency, but a functional currency should, by definition, not be a good investment (that is, something that increases in value more quickly than other assets in the economy). If the relative value of your currency keeps increasing, then you don't want to spend it, if people aren't spending the currency then it is not in fact a functional currency, and if it is not a functional currency, then it ought not have any value.
- mjburgess 4y ago
  Yip, we have all the history we need in economics to know what makes a good currency. The problem with crypto is all the tech-utopians making it, never read any economics (or political theory); and all the financiers hyping it, never read any tech, so presume their education isnt relevant. Bitcoin is a mirror image of bread-coins which subsequently rot. We know not to make currency out of bread (ie., items with negative time-bounded exchange value), I hope we have now discovered not to make them out of blockchain-slices.
  - deleted 4y ago
    [deleted]
  - ephbit 4y ago
    > The problem with crypto is all the tech-utopians making it, never read any economics (or political theory) ... Now that's some claim. You probably disagree with me when I say that austrian economics [1] is indeed an economic school. Folks like Saifedean Ammous [2] appear to at least have tried reading up on some economics. [1] https://en.wikipedia.org/wiki/Austrian_economics https://en.wikipedia.org/wiki/Austrian_economics [2] https://lexfridman.com/saifedean-ammous/ https://lexfridman.com/saifedean-ammous/
    - mjburgess 4y ago
      It's something more old-fashioned than modern economics, it's a kind of moral-political economics. Which, I agree, lines up quite well with what Bitcoin is, as a project. A The problem with the moral premises of this world view is their feudalist concequences, for reasons unknown to me, utopians of this type think that if a premise is true that they dont need to think about concequences. In this case, if individualism is true, then feudalism cant possibly follow. But reality doesnt follow "ideas" in this sense. If we create a system of individual ownership of fixed resources (land, crypto, etc.) then the few there first owns everything, and hence, feudalism. I dont take this sort of "moral economics" seriously, since its not itself a serious sort of either morality, politics or economics. Its an attempt to deduce utopia from naive ridigid principles.
altacc 4y ago
It's foolish to make a prediction without the aid of a time machine. Bitcoin has been declared over many times before. I think one thing he hints at is key to bitcoin: it is part of the global financial system, not an alternative. Regardless of intent or dreams, anything born into this world is subject to the prevailing rules and will be co-opted by those with the power, money & will to do so. Which is why for all crypto's lofty goals, it's largely been used to make money and fund scams.
olalonde 4y ago
> The conclusion: it’s over. In two or three years, people won’t even talk about crypto. It will become a small corner of the investment world limited to the true believers who refuse to surrender. It's a bit ironic how all his criticism revolves around Bitcoin's price whereas that is exactly what Bitcoin supporters are invariably criticized for. One more obituary for https://99bitcoins.com/bitcoin-obituaries/ https://99bitcoins.com/bitcoin-obituaries/
- leach 4y ago
  Yeah just another BTC is dead bear market article. It’s funny because the article never talks about the actual valuable part of Bitcoin, the network. He links articles about how BTC is insecure, but none of those articles are the Bitcoin network itself failing, it was other networks with BTC on them. Seems like someone just wrote a half assed uninformed article for clicks
JonathanBeuys 4y ago
governments have printed money at unprecedented rates worldwide over the last year. If there were ever a time for BTC to be going parabolic, it would have been over the last year. What happened? It went down by half. It makes sense to look at it on a chart. Here is the money supply vs the Bitcoin price: https://twitter.com/JonathanBeuys/status/1529091761460727810 https://twitter.com/JonathanBeuys/status/1529091761460727810 First of all, the government did not start printing at unprecedented rates last year. It started that in 2008. Second, monetary policy decisions do not impact asset prices in a linear way. And also not in a real time fashion. When I look at the chart, all I see is that both - the money supply and the price of Bitcoin - went up over time.
- mjburgess 4y ago
  Only one of those curves looks like a currency. The other looks like the price of a bridge for sale.
scyclow 4y ago
I always wonder if the people writing these articles understand that a very small fraction of the NFT ecosystem lives on BTC. BTC is the only cryptocurrency it mentions by name, and it then goes on to state "oh yeah, all those NFTs are also worthless, as are the other unnamed cryptocurrencies, which I'm sure are the same thing as Bitcoin"
lampshades 4y ago
I love articles like this because they let me buy more crypto at lower prices.
snikeris 4y ago
And yet with all this negative sentiment, it still trades at $30k/per. People are still pouring $USD into it even though cash is much harder to come by. I wonder about the psychological needs of those who come out to declare victory when an asset drops in value. What is their motivation? Why does this person need to believe that Bitcoin is dead?
- steampilot 4y ago
  First of all, the sell price is $30k. That doesn't mean that it's trading at that price but just that nobody is selling it for less, or someone is quickly buying the orders that sell for less, assuming there are only a few, to maintain the appearance that it's trading at this price. Secondly, the reason why most anti coin people want it to fail is because they hate it. And most people that hate it, do it because they lost money because of it. As in gambling, over 90% of people lose money in this market. The reason why people don't hate gambling that much after they lose money there is because they think gambling is relatively fair. A lot of people that lost money on crypto did it because a 'promise' made to them by the shillers that we all see, was not met. Or even worse, there was an obvious fraud like the many rug pulls that happen, scams, or so called stable coins losing their value, even though they were not supposed to. There are more reasons to hate cryptocurrency though, like the fact that it's used by a lot of criminals, the fact that gamers can't find reasonably priced video cards anymore and also the effects it has on climate change.
  - danuker 4y ago
    > That doesn't mean that it's trading at that price but just that nobody is selling it for less, or someone is quickly buying the orders that sell for less, Yes it does. Volume on Kraken BTCUSD has been around 4-5K BTC daily in the past week, yet the price barely budged from $30k. Any trade means a person selling AND another buying. Therefore someone is buying near $30k. > And most people that hate it, do it because they lost money because of it. You have a simplistic view. Two of my friends reject it because of energy waste and unfairly high rewards to early adopters, but none of my friends abandoned it because they lost money in it. Another is worried about their inadequate cybersecurity skills in holding it. Admittedly a small sample size (N=3), but I suspect it's representative of the larger world. > over 90% of people lose money in this market. If you do the accounting in national-currencies of evaporating value, your holdings keep going up in the long-term. That is the main value proposition that I see in crypto and Bitcoin. I stay away from the rug pulls and scams that you mention, which are indeed a threat.
jacknews 4y ago
"In two or three years, people won’t even talk about crypto ... Names will be taken off arenas." Didn't those crypto.com guys buy a 10-year contract? I really think this is wishful thinking by the author. I'm not a crypto fan, but it's undeniable that serious investments are now involved, and really, why is crypto much different than gold, or sovereign currencies? They're all only worth what everyone agrees they're worth, ultimately.
- mtoner23 4y ago
  Sovereign Countries produce goods and services with their curriences. When people trade dollars the world does things. when people trade bitcoin...
  - null0pointer 4y ago
    > When people trade dollars the world does things. when people trade bitcoin... the world continues to do things. The unit of account has nothing to do with actual production.
    - mtoner23 4y ago
      Yes it does, try making a company that does all business in Indian Rupees or bitcoin or whatever other currency. you will find that you produce less. The unit of account absolutely matters
- almost_usual 4y ago
  Sovereign currencies are backed by military force. Gold has some intrinsic value but is more similar to Bitcoin.
  - ricochet11 4y ago
    many of us choose crypto for this reason, it isnt backed by military force. it is backed by the work and collaboration and agreement of people all over the world.
dqft 4y ago
"hacker news is to tech what cnbc is to finance" can all laugh and move on now
mgamache 4y ago
What a waste of time: *Not An Inflation Hedge* (it's appreciating much faster than inflation over its life) *Bitcoin Actually Created Inflation* (What? the FED pumped money from thin air and it's Bitcoins' fault) *Unresponsive To Higher Costs* (There's more to cost then cost of goods -- you know, like there's a market involved) *Lack of Transaction Demand* (why transact an asset that's volatile, but apricating so quickly?) *Failed Security Promises* (not sure WTF he is talking about) *Stable Coins Shouldn’t Be Volatile* (so BTC is now responsible for Stable Coin prices?)
- qgin 4y ago
  > it's appreciating much faster than inflation over its life I have no doubt that people who bought in early have beat inflation very well, but that doesn’t make it an inflation hedge. It doesn’t move inversely from inflation.
  - mgamache 4y ago
    What would be an inflation hedge that isn't an asset that just goes up in value greater than inflation? FTA: "An inflation hedge is an investment that is considered to protect the decreased purchasing power of a currency that results from the loss of its value due to rising prices either macro-economically or due to inflation. It typically involves investing in an asset that is expected to maintain or increase its value over a specified period of time. Alternatively, the hedge could involve taking a higher position in assets, which may decrease in value less rapidly than the value of the currency." https://www.investopedia.com/terms/i/inflation-hedge.asp https://www.investopedia.com/terms/i/inflation-hedge.asp
sf_rob 4y ago
I think ultimately the arguments against Bitcoin here revolve around it (still) being a speculative asset. I believe that speculative assets would inherently have the following properties: * Are high beta (outsized correlation with general market moves) * Are not (primarily) counter inflationary due inflation being a much smaller and uncorrelated to negatively correlated with speculation * Are not (primarily) priced by scarcity since sentiment will effect price more than predictably slowing supply * Are not (primarily) priced by usage since speculation is a greater use case for the time being It remains to be seen whether Bitcoin will move into a more mature category. I have a small position (~1%, selling along the way) in Bitcoin under the digital gold argument/for fun, but I expect it to remain more volatile than gold for the foreseeable future.
ohwellhere 4y ago
> Stablecoins are this generations pets.com. *NFTs are the Beanie Babies.* I've been bearish on Bitcoin for fundamental reasons for years, but I'm not an expert by any means, and I have no idea what's actually true. But THAT SUMMARY _feels_ so true.
AnonHP 4y ago
I didn’t find a lot of substance in this article to make bold claims like “In two or three years, people won’t even talk about crypto.” My guess is that the author is shorting the major cryptocurrencies and could do with more negative sentiment. I’m sure the claims about crypto dying will age terribly. It may die in a decade, who knows? But in two or three years, with recessions and people wanting more than what governments and corporations can offer? I don’t think so.
papito 4y ago
Doesn't 20% of all Bitcoin transactions fail? On what planet is this an effective worldwide payment system?
unboxingelf 4y ago
Bitcoin has proven to be an excellent store of value and if you disagree trying looking at a log scale. I think this is primarily because Bitcoin is a sound money that doesn’t erode from debasement like government money does.
- zacharytelschow 4y ago
  Stores of value are, by definition, stable over time. An ounce of gold has been able to buy you a nice suit for hundreds of years, for example. How can something that fluctuates wildly in price claim to be a store of value? It's nonsensical.
  - unboxingelf 4y ago
    Here’s the definition from wikipedia: A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. I stand by my statement that Bitcoin is a store of value because it retains purchasing power into the future. The housing market fluctuates too and most folks consider real estate assets as a store of value.
gxt 4y ago
Bitcoin is a store for value. An affordable and democratic equivalent to the housing market. The limited and finite quantity of coins means it is destined to rise in value proportionally to the population that can access and afford it.
lrvick 4y ago
Another entry for https://www.bitcoinisdead.org/ https://www.bitcoinisdead.org/ This, like the rest of them, likely will not age well.
paystaxes 4y ago
never change, Hacker News
danuker 4y ago
> To be fair, the traditional inflation hedge of gold is largely flat over the last year and has underperformed BTC over longer time periods. However, the US dollar index is at 20 year highs! The USD index is defined in terms of other fiat currencies. It is meaningless; only shows how fast currencies are debasing against each other. > And many commodities are at 20 year highs to the dollar! This means the dollar is at its least worth in the past 20 years, so inflation HAS occurred.
danuker 4y ago
> Well, governments have printed money at unprecedented rates worldwide over the last year. False. 2020 is the year you're thinking of. https://am.jpmorgan.com/sg/en/asset-management/liq/insights/market-insights/guide-to-the-markets/guide-to-the-markets-slides-apac/global-economy/gtm-apac-centralbankbalsheet/ https://am.jpmorgan.com/sg/en/asset-management/liq/insights/...

115 points by RickJWagner 4y ago

jqpabc123 4y ago

The Bitcoin speculation thesis will live on --- proving that new suckers are born every minute.

danuker 4y ago
Or maybe, just maybe, that more fiat liquidity is created every minute.

turtledove 4y ago

> The conclusion: it’s over. In two or three years, people won’t even talk about crypto. One hopes.

zhoujianfu 4y ago
https://www.bitcoinisdead.org/ https://www.bitcoinisdead.org/

sudden_dystopia 4y ago

You didn’t call a bubble…we are in a recession. If you want to continue living with a continually debased fiat currency, that’s your choice. But don’t shit on people that are trying to circumvent the authoritarian control on the monetary system. Yes, I understand that most crypto is a scam. I do think BTC can possibly be different.

boplicity 4y ago
Imagine if the U.S. dollar lost 3/4 of its value in a single year, and regularly doubled (and halved) in value. That's the reality of Bitcoin -- anything else is a fantasy, or, at best, a naive hope.
- PKop 4y ago
  >regularly doubled and halved This is why it's not even close to dead and will continue to get flows of liquidity during boom cycles, because many others also see this regularity you've identified.
- marketneutral 4y ago
  check out the charts of SNAP (just this morning), AMZN, NFLX, TSLA, FB, GOOG, do you have the same criticisms for the biggest equities in the US stock market?
  - spamizbad 4y ago
    Apples and oranges. Stocks serve a radically different role than currency. But you are very right about one thing: cryptocurrency behaves a lot like a tech stock.
  - buzzdenver 4y ago
    Those are equity, not currency. There is a reason why employees of those companies get paid in local currency, and not company stock.
    - triceratops 4y ago
      Their employees get both local currency and company stock.
      - buzzdenver 4y ago
        Majority being currency, unless the stock goes up a crazy crazy amount.
  - grumple 4y ago
    When's the last time a major index lost 50% of its value? - 2008 crash due to deregulation Does it happen every two years? - obviously not Are stocks intended to be currency? - no Stocks also are attached to real property - ownership in a revenue / profit generating company and their assets. Crypto is only a vehicle for speculation. A currency should not experience regular crashes or explosions of value. Assets are generally more volatile by their very nature.
eropple 4y ago
If you bet on Bitcoin because of a "debased fiat currency", you have likely lost a grievous amount of value in whatever denomination anyone other than you actually cares about. Meanwhile, you still can't use it to buy a sandwich and promises to the contrary are over five years old with no progress to speak of. It remains merely environmentally disastrous not-money. Gold buggery is eternal, though; I wonder if the elderly watching right-wing news channels are the next to be targeted with buy-it-now ads.
- paystaxes 4y ago
  > If you bet on Bitcoin because of a "debased fiat currency", you have likely lost a grievous amount of value in whatever denomination anyone other than you actually cares about. My Venezuelan friends feel differently. > you still can't use it to buy a sandwich https://www.investing.com/news/cryptocurrency-news/walmart-mcdonalds-and-thousands-of-other-stores-to-accept-bitcoin-via-strikes-lightning-network-2800728 https://www.investing.com/news/cryptocurrency-news/walmart-m... >It remains merely environmentally disastrous https://www.coindesk.com/business/2021/03/05/the-frustrating-maddening-all-consuming-bitcoin-energy-debate/ https://www.coindesk.com/business/2021/03/05/the-frustrating...

throw__away7391 4y ago

> El Salvador will revert to using whatever worthless currency they had before Bitcoin. Um, the US dollar? (Not that I in any way shape or form support crypto just to be clear)

pcthrowaway 4y ago
Yeah, this line specifically made me really question how much thought the author put into this. Even just the assumption that "whatever else they were using is also worthless" says a lot about their willingness to jump to conclusions
thesausageking 4y ago
Yeh, that stood out to me too. If the author doesn't know that El Salvador uses the dollar and is embracing Bitcoin partly to decouple their economy from USD, then I question everything he says. One thesis for Bitcoin is that the global economy is transitioning away from the petrodollar system and Bitcoin may play a part in the reserve currencies that replace it. El Salvador just hosted a summit with 44 countries to discuss adopting Bitcoin as legal tender and moving to a new reserve system.
- throw__away7391 4y ago
  > decouple their economy from USD You misspelled "attempt to cash grab by capitalizing on a silly trend"
samatman 4y ago
Nothing like taking a drive-by shit on developing countries to convince me of what a nice guy the author is.

5350-uiop-1130 4y ago

using underlines for emphasis and no underlines for links, great work.

cj 4y ago
I quite like when key parts of each paragraph is emphasized in some way. It makes skimming the article much easier / quicker. Similar to https://bionic-reading.com/ https://bionic-reading.com/ which was on HN recently, except at the sentence level instead of every word.
rieTohgh6 4y ago
Well that article is a waste of time even if it was properly formatted. Foe example "Failed Security Promises" sections talks about BTC and links to unrelated Solana bridge hack. There is nothing new or interesting, just snippets of random crypto bashing. I would love to see crypto and related buzzwords dead but this submission fails to convince me it is finally happening.
- 5350-uiop-1130 4y ago
  yeah it's a naive take.
AnonHP 4y ago
That was annoying for me too. I kept tapping on the underlines to see if those were links, and found that they weren’t.

pavlov 4y ago

There have been numerous Bitcoin theses over the years and they’re all broken. Is it peer-to-peer digital cash like the original white paper claims? Clearly not, with slow settlement and high transaction costs. Is it an uncorrelated hedge against stock market volatility? No, it trades like leveraged Nasdaq. Is it a store of value based on [insert lurid fantasy about digital energy crystal magic on the blockchain]? No, see above. Is it a backbone for other, faster payment systems? No, see the miserable state of the Lightning Network after nearly a decade. Is it a system for remittances to the third world? No, see El Salvador’s experiment. Is it a way out of dollar dependency for third world governments? No, see El Salvador again. Is it a way for North Korea to get paid when extorting Western companies? In fact yes, this use case does seem to work.

tootie 4y ago
It's absolutely a pyramid scheme. But that doesn't mean it will actually collapse. A lot of the best known pyramid schemes (Amway, Mary Kay) ended being incredibly durable businesses where all the people who lost their shirts failed to dissuade the next generation.
- eldenwrong 4y ago
  It's absolutely not. Go google the definition of a pyramid scheme
  - moron4hire 4y ago
    Not a convincing argument.
    - eldenwrong 4y ago
      To engage in rational discourse one has to a at least put minimum effort in the topic
      - moron4hire 4y ago

eldenwrong 4y ago

sdfhdhjdw3 4y ago
I read this in a Spanish or Italian accent.
- mat0 4y ago
  Why?
  - sdfhdhjdw3 4y ago
    That's my estimation of the commenter's first language, given his spelling mistakes.
tootie 4y ago
Did you read this post? If you bet on crypto as a hedge against inflation you lost very badly. The S&P is virtually guaranteed to recover its losses and will likely end up positive for the year. BTC and others we have no idea. This was the big test and it failed miserably.
- eldenwrong 4y ago
  Love when IYIs make up random tests on short timeframe where Bitcoin constantly fails. When stock market speculators entered like sheep into Bitcoin it was obvious that the correlation with the stock market would increase.
  - tootie 4y ago
    It absolutely was not obvious. At least not to anyone who believed the mission statement. Read the post and tell me what is wrong. It's a bit coarse, but still accurate. BTC was created ostensibly as a privacy currency. A job it failed at by deflating wildly until it was utterly useless for simple transactions and became an investment asset. Amateurs saw it going up and wanted in, then it crashed much harder than every other investment class. It was supposedly an inflation hedge because it wasn't subject to central bankers, yet it lost value far faster than any fiat currency. What even is the current crash? There's no fundamentals like yields or P/E ratios to say that any crypto has gained or lost any intrinsic value. There's no equity voting rights. There's no index associated to it's purchasing power. There's no bonds denoted in any crypto value. It is driven entirely by sentiment. After the dotcom bust, it took the NASDAQ _17 years_ to fully recover to it's peak. Crypto investors are not going to wait that long.

PKop 4y ago

>Fed holdings went from $4T to $9T over the last ten years. >By contrast, the cumulative crypto complex grew from essentially $0 to $2T before its recent crash. Where did this money come from? It was essentially a money multiplier effect of QE. >Crypto is now collapsing because the Fed is tightening. Yes, and when the Fed reverses course after everything breaks from this tightening, BTC will rise again. Why are extreme boom and bust cycles of crypto surprising to anyone anymore? It is the asset most correlated change in global liquidity. And if the author thinks the liquidity spigot is forever cut off with this much global debt, he's got another think coming. The Fed balance sheet will be going to 15, 20, $30 trillion eventually. No entity has a big enough balance sheet to buy the enormous debt and deficits the US produces, and the Eurodollar market can't function without continued liquidity injections.

onlyrealcuzzo 4y ago
> Yes, and when the Fed reverses course after everything breaks from this tightening, BTC will rise again. Why are extreme boom and bust cycles of crypto surprising to anyone anymore? I wouldn't be so sure. The narrative for crypto was that interest rates were never going to go up, QE was never going to stop, and we were going to see hyper inflation. Somehow - crypto was uniquely the only possible hedge against this. This has proven to be false. It's at least going to need a new narrative. At some point, it's going to run out of narratives, and it's going to need to actually deliver value.
- bradstewart 4y ago
  Despite all of the narratives you'd read on HN, I honestly don't think the majority of "regular" people who helped drive the boom needed any story beyond "look how fast it's going up!". Hell, I'm also guilty of falling for that at times. It can, and likely will, happen again.
  - onlyrealcuzzo 4y ago
    The "look how fast it's going up" needs a narrative to get going up in the first place...

marketneutral 4y ago

BTC is down 50% from ATH while Nasdaq is off 30% and S&P 20%, Bonds (AGG) down 15%, all in the span of 6 months. BTC's investment thesis is not invalidated for sliding along with every single other asset class in one of the worst historic starts to a year. Try a longer term perspective, and BTC is indeed still deflationary - its potential to replace central bank functionality and to be a secure, global SoV is still valuable to investors.

notahacker 4y ago
It's claimed ability to be a SoV is rather damaged by it falling more than other asset classes. If it was a more secure alternative to gold it should have headed in the other direction...
- eldenwrong 4y ago
  Its on the path to become a SoV. You don't get there on a straight line...
  - pclmulqdq 4y ago
    It's been on that path for 15 years, when is it supposed to get there?
    - lampshades 4y ago
      Are you blind? It is getting there quick. 15 years is not a long time.
      - pclmulqdq 4y ago
        In terms of tech innovations in the modern day, 15 years is an eternity. Google didn't take 15 years to become a massive search engine, FB didn't take 15 years to become the dominant social network. Bitcoin was supposed to have started acting counter-cyclically (like gold) when it got mass adoption. So, 2018? Instead, it acts like leveraged NASDAQ in its pricing, and has absolutely none of the utility that a cryptocurrency probably should have. The only benefit of bitcoin is name recognition. That doesn't create a currency or a store of value. The volatility of BTC/USD has only increased, as well as the correlation with QQQ, which does not suggest that BTC will ever become a store of value. All fundamental signs point to a $0 value for bitcoin. Unfortunately, the dinosaur coin (BTC) will probably drag down the coins with utility (eg Solana, Zcash, and Monero) with it.

deleted 4y ago

[deleted]

rr808 4y ago

I have no need for bitcoin but looking at transaction costs, and the financial restrictions on citizens of many countries there is definitely a need for some kind of crypto currency. I can't see any other cc more trusted that BTC right now.

namaria 4y ago
The problem of transferring value around unjust restrictions is not solved by crypto tokens or the blockchain, it's solved by the money markets around these tokens at both ends of the transaction.
- rr808 4y ago
  In Western countries yes, in many countries there are many legal restrictions.

Barrera 4y ago

There's so much wrong with this essay, it's hard to know were to start. And I'm not just talking about the Bitcoin part. Let's take this chestnut: > As the Fed printed more money, more crypto assets were created. The author is probably referring to Quantitative Easing. But QE is not "money printing." It is an asset swap in which the Fed issues a utility token called "bank reserves" in exchange for a treasury or mortgage backed security. Bank reserves can not be used outside of the Federal Reserve system. They can not be converted to "cash," nor can they be used to pay salaries, bonuses, etc. (They can be converted to treasuries through Quantitative Tightening). Bank reserves are not money. Therefore the fed printed no money. It did, however, do a lot of asset swaps, accumulating a bunch of treasuries and MBS, while issuing a lot of bank reserves. This is not a mainstream view, but it is supported by the evidence. If you try to find documentary evidence for the notion of the Fed money printer spinning new dollars into existence, you will find none. Even worse, some economist view QE as a restriction on money. By locking highly valuable collateral (treasuries) on the Fed balance sheet, the financial system is deprived of the stuff that keeps it going. You see this manifest itself with the nearly $2 trillion in reverse repo being done now. Because it's all most people care about, let's stick with the inflation hedge thing. > Now, that’s from an all time high but the point is that all time high came before evidence of inflation. Once the inflation arrived, BTC has gone only one direction – the wrong one. An asset class that correctly hedged against CPI acceleration (as separate from money printing) would show exactly this behavior. A bull market prior to the appearance of CPI acceleration. Then, when the peak is reached, the hedge loses steam and retraces some of the gains. This behavior is sometimes called "buy the rumor sell the news." I can see how it might be irritating to separate CPI acceleration from money printing, but this is the conundrum you must resolve for yourself in today's world. I'm not saying that Bitcoin is a hedge against "inflation." I'm just saying that the authors statements and conclusions aren't the only explanations for the price behavior of Bitcoin. There are many confounding factors under the surface.

spupe 4y ago
There were several other mistakes there, but the most annoying to me was this hand-waving between correlation and causation. Sure, crypto boomed during a period of intense QE. There were also unprecedented cash payments for everyone and a big supply shock. I think the author's analysis of the relationship between inflation and BTC was equally dumb, simply noticing an inverse correlation. I'm totally not a crypto apologist btw, just pointing out inaccuracies.

lgrapenthin 4y ago

> If there were ever a time for BTC to be going parabolic, it would have been over the last year. What happened? It went down by half. > Now, that’s from an all time high but the point is that all time high came before evidence of inflation. Evidence of inflation came before Bitcoins existence. "but the point is" ... very fabricated.

ryandvm 4y ago

Bitcoin as an investment always struck me as a rather silly idea. Bitcoin was supposed to be useful because it was a decentralized currency, but a functional currency should, by definition, not be a good investment (that is, something that increases in value more quickly than other assets in the economy). If the relative value of your currency keeps increasing, then you don't want to spend it, if people aren't spending the currency then it is not in fact a functional currency, and if it is not a functional currency, then it ought not have any value.

mjburgess 4y ago
Yip, we have all the history we need in economics to know what makes a good currency. The problem with crypto is all the tech-utopians making it, never read any economics (or political theory); and all the financiers hyping it, never read any tech, so presume their education isnt relevant. Bitcoin is a mirror image of bread-coins which subsequently rot. We know not to make currency out of bread (ie., items with negative time-bounded exchange value), I hope we have now discovered not to make them out of blockchain-slices.
- deleted 4y ago
  [deleted]
- ephbit 4y ago
  > The problem with crypto is all the tech-utopians making it, never read any economics (or political theory) ... Now that's some claim. You probably disagree with me when I say that austrian economics [1] is indeed an economic school. Folks like Saifedean Ammous [2] appear to at least have tried reading up on some economics. [1] https://en.wikipedia.org/wiki/Austrian_economics https://en.wikipedia.org/wiki/Austrian_economics [2] https://lexfridman.com/saifedean-ammous/ https://lexfridman.com/saifedean-ammous/
  - mjburgess 4y ago
    It's something more old-fashioned than modern economics, it's a kind of moral-political economics. Which, I agree, lines up quite well with what Bitcoin is, as a project. A The problem with the moral premises of this world view is their feudalist concequences, for reasons unknown to me, utopians of this type think that if a premise is true that they dont need to think about concequences. In this case, if individualism is true, then feudalism cant possibly follow. But reality doesnt follow "ideas" in this sense. If we create a system of individual ownership of fixed resources (land, crypto, etc.) then the few there first owns everything, and hence, feudalism. I dont take this sort of "moral economics" seriously, since its not itself a serious sort of either morality, politics or economics. Its an attempt to deduce utopia from naive ridigid principles.

altacc 4y ago

It's foolish to make a prediction without the aid of a time machine. Bitcoin has been declared over many times before. I think one thing he hints at is key to bitcoin: it is part of the global financial system, not an alternative. Regardless of intent or dreams, anything born into this world is subject to the prevailing rules and will be co-opted by those with the power, money & will to do so. Which is why for all crypto's lofty goals, it's largely been used to make money and fund scams.

olalonde 4y ago

> The conclusion: it’s over. In two or three years, people won’t even talk about crypto. It will become a small corner of the investment world limited to the true believers who refuse to surrender. It's a bit ironic how all his criticism revolves around Bitcoin's price whereas that is exactly what Bitcoin supporters are invariably criticized for. One more obituary for https://99bitcoins.com/bitcoin-obituaries/ https://99bitcoins.com/bitcoin-obituaries/

leach 4y ago
Yeah just another BTC is dead bear market article. It’s funny because the article never talks about the actual valuable part of Bitcoin, the network. He links articles about how BTC is insecure, but none of those articles are the Bitcoin network itself failing, it was other networks with BTC on them. Seems like someone just wrote a half assed uninformed article for clicks

JonathanBeuys 4y ago

governments have printed money at unprecedented rates worldwide over the last year. If there were ever a time for BTC to be going parabolic, it would have been over the last year. What happened? It went down by half. It makes sense to look at it on a chart. Here is the money supply vs the Bitcoin price: https://twitter.com/JonathanBeuys/status/1529091761460727810 https://twitter.com/JonathanBeuys/status/1529091761460727810 First of all, the government did not start printing at unprecedented rates last year. It started that in 2008. Second, monetary policy decisions do not impact asset prices in a linear way. And also not in a real time fashion. When I look at the chart, all I see is that both - the money supply and the price of Bitcoin - went up over time.

mjburgess 4y ago
Only one of those curves looks like a currency. The other looks like the price of a bridge for sale.

scyclow 4y ago

I always wonder if the people writing these articles understand that a very small fraction of the NFT ecosystem lives on BTC. BTC is the only cryptocurrency it mentions by name, and it then goes on to state "oh yeah, all those NFTs are also worthless, as are the other unnamed cryptocurrencies, which I'm sure are the same thing as Bitcoin"

lampshades 4y ago

I love articles like this because they let me buy more crypto at lower prices.

snikeris 4y ago

And yet with all this negative sentiment, it still trades at $30k/per. People are still pouring $USD into it even though cash is much harder to come by. I wonder about the psychological needs of those who come out to declare victory when an asset drops in value. What is their motivation? Why does this person need to believe that Bitcoin is dead?

steampilot 4y ago
First of all, the sell price is $30k. That doesn't mean that it's trading at that price but just that nobody is selling it for less, or someone is quickly buying the orders that sell for less, assuming there are only a few, to maintain the appearance that it's trading at this price. Secondly, the reason why most anti coin people want it to fail is because they hate it. And most people that hate it, do it because they lost money because of it. As in gambling, over 90% of people lose money in this market. The reason why people don't hate gambling that much after they lose money there is because they think gambling is relatively fair. A lot of people that lost money on crypto did it because a 'promise' made to them by the shillers that we all see, was not met. Or even worse, there was an obvious fraud like the many rug pulls that happen, scams, or so called stable coins losing their value, even though they were not supposed to. There are more reasons to hate cryptocurrency though, like the fact that it's used by a lot of criminals, the fact that gamers can't find reasonably priced video cards anymore and also the effects it has on climate change.
- danuker 4y ago
  > That doesn't mean that it's trading at that price but just that nobody is selling it for less, or someone is quickly buying the orders that sell for less, Yes it does. Volume on Kraken BTCUSD has been around 4-5K BTC daily in the past week, yet the price barely budged from $30k. Any trade means a person selling AND another buying. Therefore someone is buying near $30k. > And most people that hate it, do it because they lost money because of it. You have a simplistic view. Two of my friends reject it because of energy waste and unfairly high rewards to early adopters, but none of my friends abandoned it because they lost money in it. Another is worried about their inadequate cybersecurity skills in holding it. Admittedly a small sample size (N=3), but I suspect it's representative of the larger world. > over 90% of people lose money in this market. If you do the accounting in national-currencies of evaporating value, your holdings keep going up in the long-term. That is the main value proposition that I see in crypto and Bitcoin. I stay away from the rug pulls and scams that you mention, which are indeed a threat.

jacknews 4y ago

"In two or three years, people won’t even talk about crypto ... Names will be taken off arenas." Didn't those crypto.com guys buy a 10-year contract? I really think this is wishful thinking by the author. I'm not a crypto fan, but it's undeniable that serious investments are now involved, and really, why is crypto much different than gold, or sovereign currencies? They're all only worth what everyone agrees they're worth, ultimately.

mtoner23 4y ago
Sovereign Countries produce goods and services with their curriences. When people trade dollars the world does things. when people trade bitcoin...
- null0pointer 4y ago
  > When people trade dollars the world does things. when people trade bitcoin... the world continues to do things. The unit of account has nothing to do with actual production.
  - mtoner23 4y ago
    Yes it does, try making a company that does all business in Indian Rupees or bitcoin or whatever other currency. you will find that you produce less. The unit of account absolutely matters
almost_usual 4y ago
Sovereign currencies are backed by military force. Gold has some intrinsic value but is more similar to Bitcoin.
- ricochet11 4y ago
  many of us choose crypto for this reason, it isnt backed by military force. it is backed by the work and collaboration and agreement of people all over the world.

dqft 4y ago

"hacker news is to tech what cnbc is to finance" can all laugh and move on now

mgamache 4y ago

What a waste of time: *Not An Inflation Hedge* (it's appreciating much faster than inflation over its life) *Bitcoin Actually Created Inflation* (What? the FED pumped money from thin air and it's Bitcoins' fault) *Unresponsive To Higher Costs* (There's more to cost then cost of goods -- you know, like there's a market involved) *Lack of Transaction Demand* (why transact an asset that's volatile, but apricating so quickly?) *Failed Security Promises* (not sure WTF he is talking about) *Stable Coins Shouldn’t Be Volatile* (so BTC is now responsible for Stable Coin prices?)

qgin 4y ago
> it's appreciating much faster than inflation over its life I have no doubt that people who bought in early have beat inflation very well, but that doesn’t make it an inflation hedge. It doesn’t move inversely from inflation.
- mgamache 4y ago
  What would be an inflation hedge that isn't an asset that just goes up in value greater than inflation? FTA: "An inflation hedge is an investment that is considered to protect the decreased purchasing power of a currency that results from the loss of its value due to rising prices either macro-economically or due to inflation. It typically involves investing in an asset that is expected to maintain or increase its value over a specified period of time. Alternatively, the hedge could involve taking a higher position in assets, which may decrease in value less rapidly than the value of the currency." https://www.investopedia.com/terms/i/inflation-hedge.asp https://www.investopedia.com/terms/i/inflation-hedge.asp

sf_rob 4y ago

I think ultimately the arguments against Bitcoin here revolve around it (still) being a speculative asset. I believe that speculative assets would inherently have the following properties: * Are high beta (outsized correlation with general market moves) * Are not (primarily) counter inflationary due inflation being a much smaller and uncorrelated to negatively correlated with speculation * Are not (primarily) priced by scarcity since sentiment will effect price more than predictably slowing supply * Are not (primarily) priced by usage since speculation is a greater use case for the time being It remains to be seen whether Bitcoin will move into a more mature category. I have a small position (~1%, selling along the way) in Bitcoin under the digital gold argument/for fun, but I expect it to remain more volatile than gold for the foreseeable future.

ohwellhere 4y ago

> Stablecoins are this generations pets.com. *NFTs are the Beanie Babies.* I've been bearish on Bitcoin for fundamental reasons for years, but I'm not an expert by any means, and I have no idea what's actually true. But THAT SUMMARY _feels_ so true.

AnonHP 4y ago

I didn’t find a lot of substance in this article to make bold claims like “In two or three years, people won’t even talk about crypto.” My guess is that the author is shorting the major cryptocurrencies and could do with more negative sentiment. I’m sure the claims about crypto dying will age terribly. It may die in a decade, who knows? But in two or three years, with recessions and people wanting more than what governments and corporations can offer? I don’t think so.

papito 4y ago

Doesn't 20% of all Bitcoin transactions fail? On what planet is this an effective worldwide payment system?

unboxingelf 4y ago

Bitcoin has proven to be an excellent store of value and if you disagree trying looking at a log scale. I think this is primarily because Bitcoin is a sound money that doesn’t erode from debasement like government money does.

zacharytelschow 4y ago
Stores of value are, by definition, stable over time. An ounce of gold has been able to buy you a nice suit for hundreds of years, for example. How can something that fluctuates wildly in price claim to be a store of value? It's nonsensical.
- unboxingelf 4y ago
  Here’s the definition from wikipedia: A store of value is any commodity or asset that would normally retain purchasing power into the future and is the function of the asset that can be saved, retrieved and exchanged at a later time, and be predictably useful when retrieved. I stand by my statement that Bitcoin is a store of value because it retains purchasing power into the future. The housing market fluctuates too and most folks consider real estate assets as a store of value.

gxt 4y ago

Bitcoin is a store for value. An affordable and democratic equivalent to the housing market. The limited and finite quantity of coins means it is destined to rise in value proportionally to the population that can access and afford it.

lrvick 4y ago

Another entry for https://www.bitcoinisdead.org/ https://www.bitcoinisdead.org/ This, like the rest of them, likely will not age well.

paystaxes 4y ago

never change, Hacker News

danuker 4y ago

> To be fair, the traditional inflation hedge of gold is largely flat over the last year and has underperformed BTC over longer time periods. However, the US dollar index is at 20 year highs! The USD index is defined in terms of other fiat currencies. It is meaningless; only shows how fast currencies are debasing against each other. > And many commodities are at 20 year highs to the dollar! This means the dollar is at its least worth in the past 20 years, so inflation HAS occurred.

danuker 4y ago

> Well, governments have printed money at unprecedented rates worldwide over the last year. False. 2020 is the year you're thinking of. https://am.jpmorgan.com/sg/en/asset-management/liq/insights/market-insights/guide-to-the-markets/guide-to-the-markets-slides-apac/global-economy/gtm-apac-centralbankbalsheet/ https://am.jpmorgan.com/sg/en/asset-management/liq/insights/...