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> Trust instead in the long long long history of BTC as a stable currency. You perceive it as unstable because you're using USD as a unit-of-account. As a thou
by siwatanejo 3y ago
> Trust instead in the long long long history of BTC as a stable currency.
You perceive it as unstable because you're using USD as a unit-of-account. As a thought exercise, if you were using BTC as the unit of account, what you would perceive unstable is the US dollar. And what you would see is that the USD value would be trending down against BTC, especially if you choose a time-frame equal or higher than 4 years.
So yeah mate, nothing to see here, keep holding your cash.
- ahtihn 3y agoWhy does everyone always compare BTC to USD when it comes to "holding". That's not the only alternative! You're not supposed to hold large amounts of USD over long time periods. It loses value by design. You're supposed to put excess money to more productive uses, e.g. invest it. No one ever suggests using some S&P500 ETF shares as money even though it also trends up vs the USD. Just like BTC it's also more volatile than money. Unlike BTC it represents something real though.
- siwatanejo 3y agoExcept that BTC has outperformed S&P500 for years.
- ahtihn 3y agoThat's not the point. You can cherry pick stocks that have outperformed the S&P500 too. The point is that USD isn't for holding. It's for spending. BTC is more like a stock or asset than money. Money isn't supposed to be volatile and it's not supposed to appreciate in value.
- siwatanejo 3y agoThe discussion was about perceiving bitcoin as stable or not. I brought up BTCUSD contrast, but I can bring BTCSP5 instead (with the same point), without your concerns about USD not being "holdable".
- notahacker 3y agoAs a thought experiment, if I use BTC as the unit of account, then the prices of all the stuff I want to buy denominated in Bitcoin vary wildly from month to month. And if I choose a time frame of, say, 25 months or 19 months instead of 4 years, my savings lost more than half their purchasing power, which is far worse than anything QE has done to cash over equivalent time frames (ironically over a timescale which has been exceptionally bad for cash and exceptionally favourable to a notional "safe asset" alternative)
- imtringued 3y ago>As a thought exercise, if you were using BTC as the unit of account, what you would perceive unstable is the US dollar. No, you would literally have to negotiate prices every single day. The vast majority of currencies have less volatility than Bitcoin. People don't think the dollar is unstable in the euro area.
- varjag 3y agoNo, you will perceive each and every other currency in the world fluctuating against BTC pretty much in sync. Which suggests it's the BTC volatility that is the invariant in the system.
- siwatanejo 3y agoUntil it doesn't.
- tsimionescu 3y agoThe point is that, so far, BTC is objectively extremely volatile. That it might not be in some future is not an argument to rely on it today.
- siwatanejo 3y agoThe volatility of it is trending down year after year.
- robryan 3y agoWith Bitcoin you have to think in terms of the exchange rate. To the extent that you can buy things in it most of that would be based off a dollar conversion. I doubt you can buy much denominated in Bitcoins at a stable price.
- siwatanejo 3y agoGive it time.