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Bitcoin and all other cryptocurrencies don't have a value assigned like normal currency. That means you almost never pay in bitcoin but in the bitcoin trading v

Bitcoin and all other cryptocurrencies don't have a value assigned like normal currency. That means you almost never pay in bitcoin but in the bitcoin trading value of some currency. Instead of $5 you pay the current trading value of $5 in bitcoin. That is why it doesn't work as a currency and people are complaining about how they struggle with crypto volatility. No one really thinks about how many bitcoins they have just how much that is worth in "real" money.

slicktux 9mo ago
You can say the same thing about gold.
- BadBadJellyBean 9mo ago
  At least gold is a physical good that has some use. I don't like gold speculations but bitcoins are literally just bits in a distributed database. But that is not even the problem. Most money is digital. The problem is the acceptance. It's primary use seems to be just trading it back and forth without trading it for goods.
  - slicktux 9mo ago
    They are bits that are cryptographically true and unique. It may not be tangible but now we are getting into philosophy of mathematics and whether math is real or not? I believe in math therefore I believe in cryptography.
    - BadBadJellyBean 9mo ago
      They are unique but they will cease to exist if everyone stops mining and doesn't keep a backup. They are just charges on a storage medium. You cannot use them for anything but to either keep in a wallet or move around. The transactions might be immutable but they are not persistent if not constantly tended to. Gold will stay gold for a long time without intervention. Most normal currencies are the same as bitcoin/crypto in that they are mostly digital but at least they have some mostly agreed upon value within their system. They don't need to be converted to another currency to find out which goods I can exchange for them.
      - bad_haircut72 9mo ago
        Im not a crypto person I own zero cryptocurrency - yes, it will only ever be worth what someone thinks its worth. If it all gets turned off it goes to zero, but if the network is up and someone is willing to act as an exchange, it will have value - even if it drops back to 10c. If it has some value, it can be used to move that value around. If it can be used to move that value around, then people will think it has value. Thus I dont think bitcoin is going away, though its value relative to USD could go anywhere
      - littlecranky67 9mo ago
        > Most normal currencies are the same as bitcoin/crypto in that they are mostly digital but at least they have some mostly agreed upon value within their system The Dollar has an agreed-upon value of 1 Dollar per Dollar, the Euro of 1 Euro per Euro and the Bitcoin of 1 Bitcoin per Bitcoin. There are no agreed-upon values in any currency in free market. In socialism, they would dictate that a pound of butter had to cost 1unit of some currency. But in capitalist free markets, the value of a currency is always measured realtive to others things, being it goods (such as a standardized shopping baskets used for CPI) or other currencies or assets. For example, there is no way to determine if the dollar raised or fell - it always has a value of one dollar. But there is the DXY ("dixie") dollar index, where the value of the dollar is measured by its trading price with a basket of other currencies. Now if the DXY falls, you can say the dollar lost value. You could also say, the foreign currencies increased in value. It is always relative. Plus, 100 dollars bought a whole lot of things 50 years ago, a lot less things 30 years ago, and today the same 100$ buy a lot less than that. There is no agreed upon value, it is supply and demand.
    - osigurdson 9mo ago
      >> I believe in math therefore I believe in cryptography You aren't really believing in math. Doubling the number of Bitcoin in the world is not blocked by mathematics (trivially change the constant in the source code), it is blocked by a consensus of humans believing in the artificial scarcity that a system robustly provides. For instance, if Bitcoin ever adopts post quantum cryptography, the math breaks - it is a technical fork. But, since a vast majority of participants (maintainers, miners and holders) will likely agree that it is a good idea this new fork will be named "Bitcoin" and everyone will be happy. Not math at all, rather a broad consensus among humans. I'm not suggesting Bitcoin is a bad investment at all, but believing in it because it "is math" is not correct.
    - Revolution1120 9mo ago
      Mathematics does not actually exist; it is merely a simplification of geometry. Without geometry, mathematics would not exist.
  - bediger4000 9mo ago
    You left out paying ransom, buying illegal guns and drugs, evading taxes, evading sanctions, settling inter-cartel debts, and bribing certain important world leaders
    - longitudinal93 9mo ago
      The USD still rules (by several magnitudes) for the use cases you mention.
rusticpenn 9mo ago
I dislike crypto as much as the next guy but, the normal currencies are not very different.
- BadBadJellyBean 9mo ago
  Agreed apart from the fact that most currencies don't need to be converted to another currency first to determine which goods I can exchange for them. I agree that most currencies have no inherent value, only an agreed upon value.
  - littlecranky67 9mo ago
    That is a chicken and egg problem. Look at argentina pre Miley, when the dollar/peso exchange rate was fixed and you couldn't freely exchange. People would still prefer the dollar over the peso, even though you couldn't legally agree on dollar prices in contracts such as rentals. So people were using the dollar to save in, and exchange for peso when they needed to exchange goods. My point being, you can have two competing currencies and exchange between them. In Argentinas case, the currency competition was healthy as politicians couldn't conceal their bad financial policies due to the hyper inflated exchange rate for pesos.
glitchc 9mo ago
Bitcoin behaves exactly like a fiat currency would if driven completely by market forces. It's a good thought experiment in what the exchange rate would look like if the currency value is purely derived from demand and supply.
- jjgreen 9mo ago
  I've never understood why you'd need a currency specifically for Italian cars.
  - ahartmetz 9mo ago
    Two actually! Fiat vs Ferrari. https://ferrari-imports.enigmatechnologies.dev/ https://ferrari-imports.enigmatechnologies.dev/
- lern_too_spel 9mo ago
  No, it behaves like a speculative asset. The price goes up as long as the number of people who believe it will go up increases, causing more people to buy it. Once the supply of greater fools is exhausted, there is no reason for anybody to hold it because it's price isn't going up, so they sell to find something else that goes up. This causes more people to sell so they don't lose more until the price falls to the non-speculative utility of the asset, which is 0.
johanvts 9mo ago
The reason it doesn’t work as a currency is that the transaction costs are way way to high for that. A single transaction it is literally the price of 1-2 million visa transactions. This is by design, bitcoin will never be a competitive system for payment processing, without adding centralized “2nd layer” systems, and at that point why not just use a centralized system to begin with. It makes sense, a distributed system that does the same work millions of times cannot compete with a centralized system that does it once.
- longitudinal93 9mo ago
  You obviously haven't looked into the tranasaction economics of the Lightning Network. And things will only be mentally priced in USD until we switch to something else - quite possibly Bitcoin.
  - johanvts 9mo ago
    I have, and as I have said to others the lightning network is not some magic that makes distributed PoW efficient, it just lets you conduct a bunch if transactions off chain and then record the end result. You could do that with fiat currency as well. BTC does one thing: lets users transact without possibility of double spending, without trusting any other users. Lightning network removes that last part, so you are just back to VISA/PayPal/Banks etc etc.
- littlecranky67 9mo ago
  You use outdated information. Modern Lightning, a layer 2 solution based on Bitcoin, does Bitcoin transactions in less than a second for less than any Visa fee. More to it, you can send transfers of less than 10satoshis (less than a cent) for fees in the millisatoshi range on an economical scale. Visa/Mastercard won't ever offer transfer fees of less than fixed 10cent per transaction, making micropayments impossible, and 1$ payments super expensive (more like 20cent fees on the dollar). That is one of the reasons why W3C web payments API was cancelled.
  - johanvts 9mo ago

slicktux 9mo ago

You can say the same thing about gold.

BadBadJellyBean 9mo ago
At least gold is a physical good that has some use. I don't like gold speculations but bitcoins are literally just bits in a distributed database. But that is not even the problem. Most money is digital. The problem is the acceptance. It's primary use seems to be just trading it back and forth without trading it for goods.
- slicktux 9mo ago
  They are bits that are cryptographically true and unique. It may not be tangible but now we are getting into philosophy of mathematics and whether math is real or not? I believe in math therefore I believe in cryptography.
  - BadBadJellyBean 9mo ago
    They are unique but they will cease to exist if everyone stops mining and doesn't keep a backup. They are just charges on a storage medium. You cannot use them for anything but to either keep in a wallet or move around. The transactions might be immutable but they are not persistent if not constantly tended to. Gold will stay gold for a long time without intervention. Most normal currencies are the same as bitcoin/crypto in that they are mostly digital but at least they have some mostly agreed upon value within their system. They don't need to be converted to another currency to find out which goods I can exchange for them.
    - bad_haircut72 9mo ago
      Im not a crypto person I own zero cryptocurrency - yes, it will only ever be worth what someone thinks its worth. If it all gets turned off it goes to zero, but if the network is up and someone is willing to act as an exchange, it will have value - even if it drops back to 10c. If it has some value, it can be used to move that value around. If it can be used to move that value around, then people will think it has value. Thus I dont think bitcoin is going away, though its value relative to USD could go anywhere
    - littlecranky67 9mo ago
      > Most normal currencies are the same as bitcoin/crypto in that they are mostly digital but at least they have some mostly agreed upon value within their system The Dollar has an agreed-upon value of 1 Dollar per Dollar, the Euro of 1 Euro per Euro and the Bitcoin of 1 Bitcoin per Bitcoin. There are no agreed-upon values in any currency in free market. In socialism, they would dictate that a pound of butter had to cost 1unit of some currency. But in capitalist free markets, the value of a currency is always measured realtive to others things, being it goods (such as a standardized shopping baskets used for CPI) or other currencies or assets. For example, there is no way to determine if the dollar raised or fell - it always has a value of one dollar. But there is the DXY ("dixie") dollar index, where the value of the dollar is measured by its trading price with a basket of other currencies. Now if the DXY falls, you can say the dollar lost value. You could also say, the foreign currencies increased in value. It is always relative. Plus, 100 dollars bought a whole lot of things 50 years ago, a lot less things 30 years ago, and today the same 100$ buy a lot less than that. There is no agreed upon value, it is supply and demand.
  - osigurdson 9mo ago
    >> I believe in math therefore I believe in cryptography You aren't really believing in math. Doubling the number of Bitcoin in the world is not blocked by mathematics (trivially change the constant in the source code), it is blocked by a consensus of humans believing in the artificial scarcity that a system robustly provides. For instance, if Bitcoin ever adopts post quantum cryptography, the math breaks - it is a technical fork. But, since a vast majority of participants (maintainers, miners and holders) will likely agree that it is a good idea this new fork will be named "Bitcoin" and everyone will be happy. Not math at all, rather a broad consensus among humans. I'm not suggesting Bitcoin is a bad investment at all, but believing in it because it "is math" is not correct.
  - Revolution1120 9mo ago
    Mathematics does not actually exist; it is merely a simplification of geometry. Without geometry, mathematics would not exist.
- bediger4000 9mo ago
  You left out paying ransom, buying illegal guns and drugs, evading taxes, evading sanctions, settling inter-cartel debts, and bribing certain important world leaders
  - longitudinal93 9mo ago
    The USD still rules (by several magnitudes) for the use cases you mention.

rusticpenn 9mo ago

I dislike crypto as much as the next guy but, the normal currencies are not very different.

BadBadJellyBean 9mo ago
Agreed apart from the fact that most currencies don't need to be converted to another currency first to determine which goods I can exchange for them. I agree that most currencies have no inherent value, only an agreed upon value.
- littlecranky67 9mo ago
  That is a chicken and egg problem. Look at argentina pre Miley, when the dollar/peso exchange rate was fixed and you couldn't freely exchange. People would still prefer the dollar over the peso, even though you couldn't legally agree on dollar prices in contracts such as rentals. So people were using the dollar to save in, and exchange for peso when they needed to exchange goods. My point being, you can have two competing currencies and exchange between them. In Argentinas case, the currency competition was healthy as politicians couldn't conceal their bad financial policies due to the hyper inflated exchange rate for pesos.

glitchc 9mo ago

Bitcoin behaves exactly like a fiat currency would if driven completely by market forces. It's a good thought experiment in what the exchange rate would look like if the currency value is purely derived from demand and supply.

jjgreen 9mo ago
I've never understood why you'd need a currency specifically for Italian cars.
- ahartmetz 9mo ago
  Two actually! Fiat vs Ferrari. https://ferrari-imports.enigmatechnologies.dev/ https://ferrari-imports.enigmatechnologies.dev/
lern_too_spel 9mo ago
No, it behaves like a speculative asset. The price goes up as long as the number of people who believe it will go up increases, causing more people to buy it. Once the supply of greater fools is exhausted, there is no reason for anybody to hold it because it's price isn't going up, so they sell to find something else that goes up. This causes more people to sell so they don't lose more until the price falls to the non-speculative utility of the asset, which is 0.

johanvts 9mo ago

The reason it doesn’t work as a currency is that the transaction costs are way way to high for that. A single transaction it is literally the price of 1-2 million visa transactions. This is by design, bitcoin will never be a competitive system for payment processing, without adding centralized “2nd layer” systems, and at that point why not just use a centralized system to begin with. It makes sense, a distributed system that does the same work millions of times cannot compete with a centralized system that does it once.

longitudinal93 9mo ago
You obviously haven't looked into the tranasaction economics of the Lightning Network. And things will only be mentally priced in USD until we switch to something else - quite possibly Bitcoin.
- johanvts 9mo ago
  I have, and as I have said to others the lightning network is not some magic that makes distributed PoW efficient, it just lets you conduct a bunch if transactions off chain and then record the end result. You could do that with fiat currency as well. BTC does one thing: lets users transact without possibility of double spending, without trusting any other users. Lightning network removes that last part, so you are just back to VISA/PayPal/Banks etc etc.
littlecranky67 9mo ago
You use outdated information. Modern Lightning, a layer 2 solution based on Bitcoin, does Bitcoin transactions in less than a second for less than any Visa fee. More to it, you can send transfers of less than 10satoshis (less than a cent) for fees in the millisatoshi range on an economical scale. Visa/Mastercard won't ever offer transfer fees of less than fixed 10cent per transaction, making micropayments impossible, and 1$ payments super expensive (more like 20cent fees on the dollar). That is one of the reasons why W3C web payments API was cancelled.
- johanvts 9mo ago