5 ms·

The headline is a pre-supposing statement, that relies on a false notion that people are all using bitcoin as an 'investment' rather than for other reasons such

The headline is a pre-supposing statement, that relies on a false notion that people are all using bitcoin as an 'investment' rather than for other reasons such as a currency. Only a fool is using most currencies as an investment, except perhaps as part of some hedging scheme. Bitcoin as represented in the white paper was never portrayed as an investment vehicle.

tromp 4y ago
The disinflationary emission set it up to be a speculation vehicle. For use as a currency, a fixed block subsidy, i.e. linear emission would have been far preferable.
SR2Z 4y ago
The overwhelming majority of people with Bitcoin are speculators. It's fairly useless as far as currencies go. It literally fails at the first requirement: it's not a reliable store of value.
- notch656a 4y ago
  For most cases I would not consider it the best option. However I have used bitcoin codebase based coins for transactions where the time-span was short enough that it was a reliable store of value. Reliable store of value really depends on how long you intend to hold it. Dollars are a terrible store of value over 100 years and decent over 2 years. Several crypto coins are a bad store of value over 1 week but a decent one over a couple hours. There are certain circumstances where I think it may make sense for someone to pick an alternative currency; I'm not arguing it is superior to the rest of them.
  - danans 4y ago
    > However I have used bitcoin codebase based coins for transactions where the time-span was short enough that it was a reliable store of value. > Several crypto coins are a bad store of value over 1 week but a decent one over a couple hours. What kind of (real world) transaction would need to rely on a cryptocurrency for value stability over a couple of hours time-span that wouldn't be served by fiat currency, which provides the same stability guarantees over that same time-span?
    - toqy 4y ago
      Buying drugs and other illegal things online
    - s1artibartfast 4y ago
      International transfer is a good use, as is irrevocable payment for purchased goods. There is also a strong real world value in countries where local currency is less stable and secure than crypto. Not all places have access to USD or foreign currency. There are interesting examples coming out of Argentina. Imagine living in a country where year over year inflation is ~100% and the government may periodically seize assets in your bank account.
      - bentcorner 4y ago
        > International transfer is a good use I think it could make a useful underlying tool to enable this but to be used directly by end user customers it'd be a tough sell. I've used Wise to transfer USD <-> CAD, if they use crypto to enable that (I don't think they do, but I guess they could), I couldn't really care less. I don't think your run of the mill consumer is going to want to use crypto to do the same thing. With smaller amounts the difference in cost is probably negligible, with larger amounts you could theoretically save more to make the effort worth it, but you have higher pressure to have more "traditional" assurances that nothing goes wrong.
      - danans 4y ago
        > International transfer is a good use, as is irrevocable payment for purchased goods. In what ways do cash bank transfers not work for international transfers or irrevocable payments?
        s1artibartfast 4y ago
        International wire transfers can take 1 to 5 days, and Banks can seize or reverse the funds.
        danans 4y ago
- jeffbee 4y ago
  That's the first requirement of currency? I feel like you might have made that up. It seems to me that the general character of a currency is that it is a widely-accepted medium of exchange. There are loads of currencies around the world that serve their purpose without being an even slightly good store of value. The Turkish Lira, for example, has lost 90% of its value against the Dollar in 15 years, yet it is still the going currency in that country. Edit: after reading my comment I realized it might not be clear that bitcoin is astonishingly bad at imitating currency. Almost without exception trading it for goods and services is impossible.
  - samatman 4y ago
    I like to say a currency: should be a store of value, could be a unit of account, and must be a medium of exchange.
- deleted 4y ago
  [deleted]
- lrvick 4y ago
  I use Bitcoin as a currency all the time. It is cash for the internet. If used correctly, it is the only reliable way to buy things online without giving a central company like Visa or Mastercard a log of everything you buy and where you buy it. If you dollar cost average your acquisition of Bitcoin it smooths out the conversion risk and if anything the value against USD goes reliably up over a 3+ year window.
- lupire 4y ago
  Currencies, as the name hints, are used to transmit value, not hold it beyond the short term.
highwaylights 4y ago
The great thing about Bitcoin is that it’s whatever the holder wants it to be, and nothing they don’t want it to be, while at the same time being the opposite of that to someone else, depending on what argument their trying to make and whether or not they’ve personally lost money. Anytime someone speaks crypto to me now I feel like Adam Sandler floating past Clint Howard’s window in Little Nicky: I don’t want to be part of this, they don’t want me to be part of this, and all I can do is wish them luck while they tell me they don’t need it.
- notch656a 4y ago
  I personally lost a couple dollars on litecoin but saved 10s of dollars in transaction fees by not using a credit card. So the fact I lost money, technically, doesn't mean I didn't come out ahead versus the alternatives.
  - highwaylights 4y ago
    I had to work out in my head there how many transactions you’d need to make to have saved 10s of dollars on credit card fees, and then whether or not that was worth the hassle, let alone the loss of purchase protection. It was not.
- thrwy_918 4y ago
  > The great thing about Bitcoin is that it’s whatever the holder wants it to be, and nothing they don’t want it to be If someone bought Bitcoin a year ago and wanted it to be a store of value, it is certainly not "whatever the holder wants it to be" for that person
  - jpadkins 4y ago
    If someone bought US Dollars($) a year ago and wanted it to be a store of value, it is certainly not "whatever the holder wants it to be" for that person. A lot of currencies are not a good store of value the last 18 months.
    - 4y ago
BoorishBears 4y ago
> Only a fool is using most currencies as an investment, except perhaps as part of some hedging scheme. Only a fool uses a currency that's experienced 5000% deflation? Bitcoin is a long failed currency, I can't believe there are people still trying to push that notion. Volatility is one thing, but deflation to a nonsensical degree means that using it as a way to pay for goods and services is heavily discouraged because of things like... having your $20 pizza be worth $165,000 if you had just not bought it.
- landemva 4y ago
  I have used btc as a hedge against my government and the uncontrolled judicial system, and it has been phenomenally successful. Not everyone lives an upper-middle class existence with good rule of law.
  - BoorishBears 4y ago
    So you used bitcoin for speculation. You're making my point. It's not functioning as a currency anymore, it's an investment vehicle. It'd be like if Forex was the main way that dollars got moved.
- deleted 4y ago
  [deleted]
aetherson 4y ago
This is actually exactly backward. What the paper is trying to quantify is how many people are trying to use bitcoin as an investment, versus how many are trying to use it as a currency or other financial tool (the whole thing about how many of the investors are underwater is a small point of the paper that Gizmodo is fixating on because of Gizmodo's preexisting hatred of crypto). What the paper finds (and we can certainly quibble with any paper) is evidence that the majority of people who bought Bitcoin in the 2015-2022 period did so in patterns that suggest that they're interested in an investment asset, not in a currency.

tromp 4y ago

The disinflationary emission set it up to be a speculation vehicle. For use as a currency, a fixed block subsidy, i.e. linear emission would have been far preferable.

SR2Z 4y ago

The overwhelming majority of people with Bitcoin are speculators. It's fairly useless as far as currencies go. It literally fails at the first requirement: it's not a reliable store of value.

notch656a 4y ago
For most cases I would not consider it the best option. However I have used bitcoin codebase based coins for transactions where the time-span was short enough that it was a reliable store of value. Reliable store of value really depends on how long you intend to hold it. Dollars are a terrible store of value over 100 years and decent over 2 years. Several crypto coins are a bad store of value over 1 week but a decent one over a couple hours. There are certain circumstances where I think it may make sense for someone to pick an alternative currency; I'm not arguing it is superior to the rest of them.
- danans 4y ago
  > However I have used bitcoin codebase based coins for transactions where the time-span was short enough that it was a reliable store of value. > Several crypto coins are a bad store of value over 1 week but a decent one over a couple hours. What kind of (real world) transaction would need to rely on a cryptocurrency for value stability over a couple of hours time-span that wouldn't be served by fiat currency, which provides the same stability guarantees over that same time-span?
  - toqy 4y ago
    Buying drugs and other illegal things online
  - s1artibartfast 4y ago
    International transfer is a good use, as is irrevocable payment for purchased goods. There is also a strong real world value in countries where local currency is less stable and secure than crypto. Not all places have access to USD or foreign currency. There are interesting examples coming out of Argentina. Imagine living in a country where year over year inflation is ~100% and the government may periodically seize assets in your bank account.
    - bentcorner 4y ago
      > International transfer is a good use I think it could make a useful underlying tool to enable this but to be used directly by end user customers it'd be a tough sell. I've used Wise to transfer USD <-> CAD, if they use crypto to enable that (I don't think they do, but I guess they could), I couldn't really care less. I don't think your run of the mill consumer is going to want to use crypto to do the same thing. With smaller amounts the difference in cost is probably negligible, with larger amounts you could theoretically save more to make the effort worth it, but you have higher pressure to have more "traditional" assurances that nothing goes wrong.
    - danans 4y ago
      > International transfer is a good use, as is irrevocable payment for purchased goods. In what ways do cash bank transfers not work for international transfers or irrevocable payments?
      - s1artibartfast 4y ago
        International wire transfers can take 1 to 5 days, and Banks can seize or reverse the funds.
        danans 4y ago
jeffbee 4y ago
That's the first requirement of currency? I feel like you might have made that up. It seems to me that the general character of a currency is that it is a widely-accepted medium of exchange. There are loads of currencies around the world that serve their purpose without being an even slightly good store of value. The Turkish Lira, for example, has lost 90% of its value against the Dollar in 15 years, yet it is still the going currency in that country. Edit: after reading my comment I realized it might not be clear that bitcoin is astonishingly bad at imitating currency. Almost without exception trading it for goods and services is impossible.
- samatman 4y ago
  I like to say a currency: should be a store of value, could be a unit of account, and must be a medium of exchange.
deleted 4y ago
[deleted]
lrvick 4y ago
I use Bitcoin as a currency all the time. It is cash for the internet. If used correctly, it is the only reliable way to buy things online without giving a central company like Visa or Mastercard a log of everything you buy and where you buy it. If you dollar cost average your acquisition of Bitcoin it smooths out the conversion risk and if anything the value against USD goes reliably up over a 3+ year window.
lupire 4y ago
Currencies, as the name hints, are used to transmit value, not hold it beyond the short term.

highwaylights 4y ago

The great thing about Bitcoin is that it’s whatever the holder wants it to be, and nothing they don’t want it to be, while at the same time being the opposite of that to someone else, depending on what argument their trying to make and whether or not they’ve personally lost money. Anytime someone speaks crypto to me now I feel like Adam Sandler floating past Clint Howard’s window in Little Nicky: I don’t want to be part of this, they don’t want me to be part of this, and all I can do is wish them luck while they tell me they don’t need it.

notch656a 4y ago
I personally lost a couple dollars on litecoin but saved 10s of dollars in transaction fees by not using a credit card. So the fact I lost money, technically, doesn't mean I didn't come out ahead versus the alternatives.
- highwaylights 4y ago
  I had to work out in my head there how many transactions you’d need to make to have saved 10s of dollars on credit card fees, and then whether or not that was worth the hassle, let alone the loss of purchase protection. It was not.
thrwy_918 4y ago
> The great thing about Bitcoin is that it’s whatever the holder wants it to be, and nothing they don’t want it to be If someone bought Bitcoin a year ago and wanted it to be a store of value, it is certainly not "whatever the holder wants it to be" for that person
- jpadkins 4y ago
  If someone bought US Dollars($) a year ago and wanted it to be a store of value, it is certainly not "whatever the holder wants it to be" for that person. A lot of currencies are not a good store of value the last 18 months.
  - 4y ago

BoorishBears 4y ago

> Only a fool is using most currencies as an investment, except perhaps as part of some hedging scheme. Only a fool uses a currency that's experienced 5000% deflation? Bitcoin is a long failed currency, I can't believe there are people still trying to push that notion. Volatility is one thing, but deflation to a nonsensical degree means that using it as a way to pay for goods and services is heavily discouraged because of things like... having your $20 pizza be worth $165,000 if you had just not bought it.

landemva 4y ago
I have used btc as a hedge against my government and the uncontrolled judicial system, and it has been phenomenally successful. Not everyone lives an upper-middle class existence with good rule of law.
- BoorishBears 4y ago
  So you used bitcoin for speculation. You're making my point. It's not functioning as a currency anymore, it's an investment vehicle. It'd be like if Forex was the main way that dollars got moved.
deleted 4y ago
[deleted]

aetherson 4y ago

This is actually exactly backward. What the paper is trying to quantify is how many people are trying to use bitcoin as an investment, versus how many are trying to use it as a currency or other financial tool (the whole thing about how many of the investors are underwater is a small point of the paper that Gizmodo is fixating on because of Gizmodo's preexisting hatred of crypto). What the paper finds (and we can certainly quibble with any paper) is evidence that the majority of people who bought Bitcoin in the 2015-2022 period did so in patterns that suggest that they're interested in an investment asset, not in a currency.