6 ms·

Reading through the comments here, it seems that most people on HN vastly underestimate the significance of the "store of value" use case. It is a core aspect

Reading through the comments here, it seems that most people on HN vastly underestimate the significance of the "store of value" use case. It is a core aspect of human life. And there is no other asset that does that with as little inflation and risk as Bitcoin. That seems counterintuitive because Bitcoin is portrayed as a very risky asset. Which it is in the short term. But long term, fiat, gold, equity, and real estate all have an even worse inflation and risk profile.

pcdoodle 1y ago
Shhhh. they like the hamster wheel...
- webdevver 1y ago
  i actually used to like the hamster wheel. until i learned how much money people were making on crypto. now i dont like the hamster wheel... crypto is a legit information hazard that threatens to completely demoralize the actually productive hamsters in the economy. if everyone knew they could've made more money in a year than their entire career, they'd give up working forever.
  - TrackerFF 1y ago
    You could have invested in any big tech company, and arrived in the same place. It puzzles me how people see 10x-100x’ing their money on crypto as gods gift to humanity and a stroke of brilliance, but making the same amount by investing in NVDA seem like just another lucky stock pick. If anything, there will always be the next FAANG startup, that will make one fabulously rich.
    - thom 1y ago
      For the avoidance of doubt, what’s the next 10-100x sure thing?
      - sigwinch 1y ago
        Look for something that popular AI uniformly but inexplicably endorses. One side of Costa Rica versus the other. Stock ticker symbols which coincidentally look like Gaelic words.
        BobaFloutist 1y ago
        I can't tell if you're having a psychotic break, endirsing a specific conspiracy theory, making fun of people doing either of those, or obtusely referring to a particular stock.
        sigwinch 1y ago
        I think the reaction to BitCoin in 2011 had a mix of those four, in addition to “why?”. Back then, the why brought in some libertarian utopian theory on the heels of the 2008 collapse. So, what I’m saying is that conversations on the next explosive opportunity won’t start with “why?” but instead will look like a psychotic break, conspiracy theory, parody like FartCoin, or be obtusely cloaked in jargon.
        BobaFloutist 1y ago
        Ah, that makes sense. Still not sure I could have gotten there from just your first comment, but it coheres now that I know.
      - TrackerFF 1y ago
        That requires research. Not that that crypto was a sure thing, for a long, long time. Everything that hyped it up in the start, are more or less dead now. It has been collectively decided that coins like BTC have little practical value, outside store of value. As I wrote in this thread, back in the early days the main attraction of bitcoin was mass adoption for daily use as a currency. We've long since moved away from that. What makes it valuable today, was only a part of the equation back then. And that's not taking in all the regulatory risks that were looming (not that they have been completely eliminated). Likewise, for the longest time GPUs were mainly seen as a consumer product for graphics usage. Then machine learning algorithms started using them, and the rest is history. If you invested in Nvidia on the thesis that all they ever were going to serve were gamers, you likely wouldn't have foreseen the current price. A more general and vague guess would be: Something related to data, AI, green energy, healthcare, etc. - look at our biggest unsolved problems, and then at the companies that are working to solve them.
throw0101b 1y ago
> And there is no other asset that does that with as little inflation and risk as Bitcoin. LOL. Having 30% drops is not 'little risk': * https://www.cnbc.com/2021/05/19/bitcoin-btc-price-plunges-but-bottom-could-be-near-.html https://www.cnbc.com/2021/05/19/bitcoin-btc-price-plunges-bu... Or 50%: * https://www.nbcnews.com/business/markets/bitcoin-whats-going-on-explainer-rcna28097 https://www.nbcnews.com/business/markets/bitcoin-whats-going... I want a 'store of value' to be fairly predictable, and even with inflation (generally 0-4%) fiat currencies have that (I can plan around that by investing in bonds and equities, or even some bank savings products).
- webdevver 1y ago
  true but then it always goes back up 100%... ...which is why its not gonna plunge anymore. too many people have "seen" the pattern now, and the instant it dips even 5% people are gonna be buying "the dip" in droves, thinking this is gonna be their entry, this is their moment in the sun. "I've seen it do this before, I know how it ends, I gotta get in now!!!"
  - FabHK 1y ago
    Indeed. And then at some point the sentiment will change. And at that point I hope the crypto and real world are not too intermingled, because it'll get ugly.
    - webdevver 1y ago
      its probably intermingled at the highest levels that we couldn't know of. like transferring $100 millions to overseas 'freedom fighters', 'regime change operations', various suchlike endeavours with plausible deniability. admittedly bit of a conspiracy but its not that far removed surely
      - sigwinch 1y ago
        I suspect a massive US government bailout will prove something like this.
FabHK 1y ago
Sorry, one cannot make statements about crypto "long term" yet. Nobody should hold large amounts of fiat long term. That's what shares and bonds are for, which incidentally also support productive enterprises (unlike crypto). Long term, equity, debt, gold have pretty good inflation and risk profiles. Real rates have overwhelmingly been positive, so government bonds are a fairly good store of value.
- ArtTimeInvestor 1y ago
  Real rates have overwhelmingly been positive That is what the government tells you. But I don't see that when I look up my real expenses. When I look through my old bills, what I paid for apartments, hotels, coffee it seems the real inflation was around 8% over the last 20 years. For hotels for example, it is easy to look up the same hotel today and see how prices changed. And bonds paid less than 4%. Can you give an example of something that increased less than 4% in price annually?
TrackerFF 1y ago
I believe the risk with crypto lies in the regulatory aspect. Crypto is polarized, as far as politics goes. Especially if we look past the US. When a pro-crypto government rules, risk goes down. And opposite when the skeptics take charge.

pcdoodle 1y ago

Shhhh. they like the hamster wheel...

webdevver 1y ago
i actually used to like the hamster wheel. until i learned how much money people were making on crypto. now i dont like the hamster wheel... crypto is a legit information hazard that threatens to completely demoralize the actually productive hamsters in the economy. if everyone knew they could've made more money in a year than their entire career, they'd give up working forever.
- TrackerFF 1y ago
  You could have invested in any big tech company, and arrived in the same place. It puzzles me how people see 10x-100x’ing their money on crypto as gods gift to humanity and a stroke of brilliance, but making the same amount by investing in NVDA seem like just another lucky stock pick. If anything, there will always be the next FAANG startup, that will make one fabulously rich.
  - thom 1y ago
    For the avoidance of doubt, what’s the next 10-100x sure thing?
    - sigwinch 1y ago
      Look for something that popular AI uniformly but inexplicably endorses. One side of Costa Rica versus the other. Stock ticker symbols which coincidentally look like Gaelic words.
      - BobaFloutist 1y ago
        I can't tell if you're having a psychotic break, endirsing a specific conspiracy theory, making fun of people doing either of those, or obtusely referring to a particular stock.
        sigwinch 1y ago
        I think the reaction to BitCoin in 2011 had a mix of those four, in addition to “why?”. Back then, the why brought in some libertarian utopian theory on the heels of the 2008 collapse. So, what I’m saying is that conversations on the next explosive opportunity won’t start with “why?” but instead will look like a psychotic break, conspiracy theory, parody like FartCoin, or be obtusely cloaked in jargon.
        BobaFloutist 1y ago
        Ah, that makes sense. Still not sure I could have gotten there from just your first comment, but it coheres now that I know.
    - TrackerFF 1y ago
      That requires research. Not that that crypto was a sure thing, for a long, long time. Everything that hyped it up in the start, are more or less dead now. It has been collectively decided that coins like BTC have little practical value, outside store of value. As I wrote in this thread, back in the early days the main attraction of bitcoin was mass adoption for daily use as a currency. We've long since moved away from that. What makes it valuable today, was only a part of the equation back then. And that's not taking in all the regulatory risks that were looming (not that they have been completely eliminated). Likewise, for the longest time GPUs were mainly seen as a consumer product for graphics usage. Then machine learning algorithms started using them, and the rest is history. If you invested in Nvidia on the thesis that all they ever were going to serve were gamers, you likely wouldn't have foreseen the current price. A more general and vague guess would be: Something related to data, AI, green energy, healthcare, etc. - look at our biggest unsolved problems, and then at the companies that are working to solve them.

throw0101b 1y ago

> And there is no other asset that does that with as little inflation and risk as Bitcoin. LOL. Having 30% drops is not 'little risk': * https://www.cnbc.com/2021/05/19/bitcoin-btc-price-plunges-but-bottom-could-be-near-.html https://www.cnbc.com/2021/05/19/bitcoin-btc-price-plunges-bu... Or 50%: * https://www.nbcnews.com/business/markets/bitcoin-whats-going-on-explainer-rcna28097 https://www.nbcnews.com/business/markets/bitcoin-whats-going... I want a 'store of value' to be fairly predictable, and even with inflation (generally 0-4%) fiat currencies have that (I can plan around that by investing in bonds and equities, or even some bank savings products).

webdevver 1y ago
true but then it always goes back up 100%... ...which is why its not gonna plunge anymore. too many people have "seen" the pattern now, and the instant it dips even 5% people are gonna be buying "the dip" in droves, thinking this is gonna be their entry, this is their moment in the sun. "I've seen it do this before, I know how it ends, I gotta get in now!!!"
- FabHK 1y ago
  Indeed. And then at some point the sentiment will change. And at that point I hope the crypto and real world are not too intermingled, because it'll get ugly.
  - webdevver 1y ago
    its probably intermingled at the highest levels that we couldn't know of. like transferring $100 millions to overseas 'freedom fighters', 'regime change operations', various suchlike endeavours with plausible deniability. admittedly bit of a conspiracy but its not that far removed surely
    - sigwinch 1y ago
      I suspect a massive US government bailout will prove something like this.

FabHK 1y ago

Sorry, one cannot make statements about crypto "long term" yet. Nobody should hold large amounts of fiat long term. That's what shares and bonds are for, which incidentally also support productive enterprises (unlike crypto). Long term, equity, debt, gold have pretty good inflation and risk profiles. Real rates have overwhelmingly been positive, so government bonds are a fairly good store of value.

ArtTimeInvestor 1y ago
Real rates have overwhelmingly been positive That is what the government tells you. But I don't see that when I look up my real expenses. When I look through my old bills, what I paid for apartments, hotels, coffee it seems the real inflation was around 8% over the last 20 years. For hotels for example, it is easy to look up the same hotel today and see how prices changed. And bonds paid less than 4%. Can you give an example of something that increased less than 4% in price annually?

TrackerFF 1y ago

I believe the risk with crypto lies in the regulatory aspect. Crypto is polarized, as far as politics goes. Especially if we look past the US. When a pro-crypto government rules, risk goes down. And opposite when the skeptics take charge.