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Could you explain the reasoning behind this statement?
by wwwtyro 14y ago
Could you explain the reasoning behind this statement?
- tptacek 14y agoThe collapse of the most important currency in the world is likely to be accompanied by an economic upheaval that would destroy the value of toy projects like Bitcoin.
- kiba 14y agoI never actually implies that the dollars collapse, just that there are something causing ongoing gigantic bitcoin deflation.
- tptacek 14y agoWhy would someone keep all their funds in Bitcoin if the dollar is still functioning?
- deleted 14y ago[deleted]
- kiba 14y agoThe price of bitcoin is rising. (Of course, it would be a different matter if the dollars' price is rising and bitcoin is not)
- tptacek 14y agoAt any one moment, the price of lots of things might be rising. Sometimes corn, sometimes orange juice, sometimes gold, others palladium. How am I to know when I should put all my money in a commodity or tradable instrument? There are reasons we don't use soybean oils as our currency, and one of them is "unpredictable drastic spikes in the value of a currency aren't a good thing".
- kiba 14y agoShort term: I am not a commodity trader. Long term: If you believe bitcoin have a higher probability of being a widespread currency than the probability of bitcoin losing total confidence, than it would make sense to move some of your wealth into it. Otherwise, if you think bitcoin is never going to become a big player and end up going all the way down to zero, you don't put your wealth in it. Maybe you could even bet someone that bitcoin is going to become a bunch of useless binary code.
- tptacek 14y agoIf all (or even a significant fraction) of your net worth is in Bitcoin, then you are indeed a commodity trader; you're just dealing in a particularly silly commodity.