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Its utility is similar to that of cash. But unlike cash it's (1) less fungible (2) much easier to transport (3) harder to secure from theft and/or destruction

Its utility is similar to that of cash. But unlike cash it's (1) less fungible (2) much easier to transport (3) harder to secure from theft and/or destruction * (4) value is more volatile than USD/EUR/CAD/AUD (5) incredibly resource intensive to maintain (and growing!). It's not an equity, it's a currency. The Bitcoin network is nigh "indestructible" as long as some folks still consider it useful. This delivers credibility towards the faith required to support some value. If its value dropped by 99% tomorrow (maybe from aggressive global legislation and cooperation among governments), it would still function (but perhaps primarily maintained by sanctioned countries). I think there's significant pros and cons to cryptocurrency in general and Bitcoin specifically. As the emission rate continues to decrease, I suspect its value will stay relatively high relative to what it is now. EDIT: I said in (3) above that it's harder to secure bitcoin from destruction (than cash) but in some ways it's remarkably more robust than cash. You can make as many copies of the keys securing your bitcoins as you like (and/or use multi-sig). Your home burning down would destroy cash, but if you have a backup your bitcoins are preserved. However this is in tension with "secure from theft".

ConspiracyFact 2y ago
Show me an economy that only uses bitcoin and doesn’t depend on cashing out to one fiat currency or another and I’ll allow that it’s a currency.
- OrigamiPastrami 2y ago
  El Salvador.
ethagnawl 2y ago
> Its utility is similar to that of cash. In the USA, spending cash doesn't require ~30 minutes of validation or a capital gains report.
- Empact 2y ago
  Transacting bitcoin via the lightning network is instant. Capital gains is a matter of policy and is likely to change at some point as bitcoin succeeds.
Empact 2y ago
Perhaps most importantly, unlike cash, it can't be printed, and unlike gold, its supply is not responsive to price.
- wyldfire 2y ago
  > it can't be printed New coins are minted with every block. But perhaps you mean to suggest that it's "stable" or "predictable." The emission rate of bitcoin is predictable - but this is predicated on the stability/predictability of the community of miners/stakers. It seems extremely irrational now, but if something were to change such that the community decided to drastically increase or decrease the block reward, they could indeed do so if they found consensus. > its supply is not responsive to price. While this is probably true, the value of mining equipment is directly related to the exchange rate of bitcoin (and perhaps its recent rate of increase/decrease). This doesn't impact supply, but it does impact the network OpEx.
  - dlubarov 2y ago
    Well, not just predictable but hard capped at 21M, about 19.8M (or ~94%) of which have already been mined. So in some sense, inflation tax can't exceed ~6% over all time. (I don't think it's a sustainable model, as security essentially decays over time, unless fees become extremely high which doesn't seem like a great outcome either. But that's another matter...)
    - Empact 2y ago
      There are a few answers to the long-term security budget: 1) We could maintain fees through compression, that is, by making each on-chain transaction representative of many off-chain transactions. This is beginning to happen with the lightning network, and other technologies are in the works to advance this concept. 2) Mining will become more integrated with other industrial and residential processes, which will reduce the cost of security, from a compensation standpoint. Think bitcoin miner water and space heaters in many homes, etc. 3) It's also likely that in the future institutions that rely heavily on bitcoin will voluntarily subsidize security to some extent, for the same reason they invest in vaults for other instruments. Personally I'm planning to start running a lottery miner at home just for the fun of it.

ConspiracyFact 2y ago

Show me an economy that only uses bitcoin and doesn’t depend on cashing out to one fiat currency or another and I’ll allow that it’s a currency.

OrigamiPastrami 2y ago
El Salvador.

ethagnawl 2y ago

> Its utility is similar to that of cash. In the USA, spending cash doesn't require ~30 minutes of validation or a capital gains report.

Empact 2y ago
Transacting bitcoin via the lightning network is instant. Capital gains is a matter of policy and is likely to change at some point as bitcoin succeeds.

Empact 2y ago

Perhaps most importantly, unlike cash, it can't be printed, and unlike gold, its supply is not responsive to price.

wyldfire 2y ago
> it can't be printed New coins are minted with every block. But perhaps you mean to suggest that it's "stable" or "predictable." The emission rate of bitcoin is predictable - but this is predicated on the stability/predictability of the community of miners/stakers. It seems extremely irrational now, but if something were to change such that the community decided to drastically increase or decrease the block reward, they could indeed do so if they found consensus. > its supply is not responsive to price. While this is probably true, the value of mining equipment is directly related to the exchange rate of bitcoin (and perhaps its recent rate of increase/decrease). This doesn't impact supply, but it does impact the network OpEx.
- dlubarov 2y ago
  Well, not just predictable but hard capped at 21M, about 19.8M (or ~94%) of which have already been mined. So in some sense, inflation tax can't exceed ~6% over all time. (I don't think it's a sustainable model, as security essentially decays over time, unless fees become extremely high which doesn't seem like a great outcome either. But that's another matter...)
  - Empact 2y ago
    There are a few answers to the long-term security budget: 1) We could maintain fees through compression, that is, by making each on-chain transaction representative of many off-chain transactions. This is beginning to happen with the lightning network, and other technologies are in the works to advance this concept. 2) Mining will become more integrated with other industrial and residential processes, which will reduce the cost of security, from a compensation standpoint. Think bitcoin miner water and space heaters in many homes, etc. 3) It's also likely that in the future institutions that rely heavily on bitcoin will voluntarily subsidize security to some extent, for the same reason they invest in vaults for other instruments. Personally I'm planning to start running a lottery miner at home just for the fun of it.