4 ms·

Since my $1,000 worth of bitcoins dropped in value to $150 over a period of weeks, I've become significantly less interested in using it as a currency.

sgornick 15y ago
You mean less interested in using it as a way to profit from speculation. As a currency it is not as critical that the value only goes up. A person or merchant receiving bitcoins can easily convert them out to USDs and still lose less in fees than the same transaction would cost compared to accepting a credit card or debit card payment. For example, BTC -> USD at most exchanges is around half a percent.
- georgemcbay 15y ago
  "As a currency it is not as critical that the value only goes up." True, but to be a practical currency it is critical that the value remains relatively stable. A currency capable of dropping from $1000 USD to $150 USD in a very short time is clearly not stable.
- codexon 15y ago
  This is unfortunately untrue. Bitcoin has been subject to huge 30% swings in a matter of minutes.
- deleted 15y ago
  [deleted]
- KaeseEs 15y ago
  Well, no. Currencies as we know them are not only for exchange, but also are supposed to be reasonable stores of value. If a currency loses 85% of its worth in a period of weeks, it has failed at this fundamental task. Now, for merchants this might not seem to matter, as they might be able to always convert bitcoins to a real currency immediately and never hold them long enough for depreciation to matter, but if the currency is excessively volatile there will never be a buyer at the exchange besides speculators, which prevents the currency from ever being really useful.
- Symmetry 15y ago
  It sounds like Bitcoin is doing much better in the "Medium of Exchange" side of the money coin than the "Store of Value" side.
  - wmf 15y ago
    Which is not saying much, because if you try to avoid volatility by doing a USD->BTC->USD transaction you get hit with fees that are almost as much as credit cards, not to mention the complexity.
- rsynnott 15y ago
  > As a currency it is not as critical that the value only goes up. Not just not critical, highly undesirable.
mrb 15y ago
You were gullible and invested at the peak of the bubble at $30/BTC (now worth $5/BTC). Any bubble would have crushed you, eg the dotcom stock market frenzy. Your fault. Bitcoin is up 400% over the last year (from $1 to $5/BTC), which has made it an excellent investment for other (smarter) investors not swayed by a bubble.
- ajross 15y ago
  Has anyone solved the liquidity mess? Say I want to buy a car and have to unload $20k of bitcoins. Can I do that? With a latency of less than 24 hours? Without getting my PayPal account frozen?
  - driverdan 15y ago
    What does PayPal have to do with Bitcoins? Trying to buy or sell Bitcoins with PayPal is foolish.
    - ajross 15y ago
      Right. So no liquidity solution then. It's foolish, obviously, because it doesn't work: it looks like fraud. As it does to all the other banks out there. So bitcoins are illiquid. They're like oddball collections. "Valuable" to a few, but basically useless as an "investment" to people with liquidity requirements. One corrolary you'll note is that because they are both illiquid and volatile, they even suck as a speculative investment: if you make a bad bet you can't get out of it.
  - deleted 15y ago
    [deleted]
  - mrb 15y ago
    Yes you can, but not in 24h. (Hopefully buying a $20k car is not an impulse buy you make in a day, ahem...) Sell the BTC on MtGox and withdraw the USD via Dwolla directly to your bank account. No need to use Paypal! MtGox's withdrawal limit can be raised to $10k per day if you provide a notarized government ID copy (IIRC). Dwolla's limit is $5k per transfer with as many txfer per day. So it would take 2 days for completing the withdrawal, plus a few days for your bank to actually post the transaction (thank the legacy financial system for these unexplainable delays). Of course the very best way to do it is to actually buy a car in bitcoins... see the Bitcoin Market subforum and find a seller. I remember last year someone was happy to announce he was the first person ever to buy a used car with bitcoins.

sgornick 15y ago

You mean less interested in using it as a way to profit from speculation. As a currency it is not as critical that the value only goes up. A person or merchant receiving bitcoins can easily convert them out to USDs and still lose less in fees than the same transaction would cost compared to accepting a credit card or debit card payment. For example, BTC -> USD at most exchanges is around half a percent.

georgemcbay 15y ago
"As a currency it is not as critical that the value only goes up." True, but to be a practical currency it is critical that the value remains relatively stable. A currency capable of dropping from $1000 USD to $150 USD in a very short time is clearly not stable.
codexon 15y ago
This is unfortunately untrue. Bitcoin has been subject to huge 30% swings in a matter of minutes.
deleted 15y ago
[deleted]
KaeseEs 15y ago
Well, no. Currencies as we know them are not only for exchange, but also are supposed to be reasonable stores of value. If a currency loses 85% of its worth in a period of weeks, it has failed at this fundamental task. Now, for merchants this might not seem to matter, as they might be able to always convert bitcoins to a real currency immediately and never hold them long enough for depreciation to matter, but if the currency is excessively volatile there will never be a buyer at the exchange besides speculators, which prevents the currency from ever being really useful.
Symmetry 15y ago
It sounds like Bitcoin is doing much better in the "Medium of Exchange" side of the money coin than the "Store of Value" side.
- wmf 15y ago
  Which is not saying much, because if you try to avoid volatility by doing a USD->BTC->USD transaction you get hit with fees that are almost as much as credit cards, not to mention the complexity.
rsynnott 15y ago
> As a currency it is not as critical that the value only goes up. Not just not critical, highly undesirable.

mrb 15y ago

You were gullible and invested at the peak of the bubble at $30/BTC (now worth $5/BTC). Any bubble would have crushed you, eg the dotcom stock market frenzy. Your fault. Bitcoin is up 400% over the last year (from $1 to $5/BTC), which has made it an excellent investment for other (smarter) investors not swayed by a bubble.

ajross 15y ago
Has anyone solved the liquidity mess? Say I want to buy a car and have to unload $20k of bitcoins. Can I do that? With a latency of less than 24 hours? Without getting my PayPal account frozen?
- driverdan 15y ago
  What does PayPal have to do with Bitcoins? Trying to buy or sell Bitcoins with PayPal is foolish.
  - ajross 15y ago
    Right. So no liquidity solution then. It's foolish, obviously, because it doesn't work: it looks like fraud. As it does to all the other banks out there. So bitcoins are illiquid. They're like oddball collections. "Valuable" to a few, but basically useless as an "investment" to people with liquidity requirements. One corrolary you'll note is that because they are both illiquid and volatile, they even suck as a speculative investment: if you make a bad bet you can't get out of it.
- deleted 15y ago
  [deleted]
- mrb 15y ago
  Yes you can, but not in 24h. (Hopefully buying a $20k car is not an impulse buy you make in a day, ahem...) Sell the BTC on MtGox and withdraw the USD via Dwolla directly to your bank account. No need to use Paypal! MtGox's withdrawal limit can be raised to $10k per day if you provide a notarized government ID copy (IIRC). Dwolla's limit is $5k per transfer with as many txfer per day. So it would take 2 days for completing the withdrawal, plus a few days for your bank to actually post the transaction (thank the legacy financial system for these unexplainable delays). Of course the very best way to do it is to actually buy a car in bitcoins... see the Bitcoin Market subforum and find a seller. I remember last year someone was happy to announce he was the first person ever to buy a used car with bitcoins.