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There are no grounds to say that BTC should be a superior store of value. Aside from its very public history of being an absolutely abysmal store of value, it

There are no grounds to say that BTC should be a superior store of value. Aside from its very public history of being an absolutely abysmal store of value, it also has no central bank tending its value, as fiat currencies do, and no substantial trade denominated in it, which is what gives fiat currencies value in forex markets. It is solely a speculative vehicle. It sucks at commerce and it sucks at investment. Bitcoin's sole value as a currency lies in its ease of use as a back-end for transactions. It's not a bad intermediary for transactions between people using different currencies, provided the third party transaction service has legal, fast, and cheap ways to convert to and from fiat in both countries. But then, it's not so much a currency as a transport layer with added uncertainty. I've yet to see a compelling case for BTC as anything but TCP/IP for dollars or a wayback machine for anything you want. It's bad for savings, god-awful for investment, and useless for [legal] commerce.

derefr 12y ago
I think you're attacking somewhat of a weak-man: the people saying Bitcoin as it is valued right now is any sort of store of value (and there are, indeed, such people) are obviously slightly insane. But in a long-term sense—an imagined future where all the speculative value has gone out of Bitcoin and it is now just "worth what it is worth"—it would make a fairly good store of value, in exactly the same way gold would if we knew exactly how much of it there was to mine out of the earth, if some property of the (never-changing) extraction process meant that it was only able to be mined out at an exactly inverse-exponential rate, and if it were very easy to handle the resulting gold in 0.00000000001g pieces.
- redthrowaway 12y ago
  A store of value must be such over any given timeframe. If the balance in your savings account is worth $100 today, $50 in three months, $150 in six months, and $75 in a year, then it is a terrible store of value -- regardless of whether it's worth $200 two years from now. Similarly, talking about imagined futures is not a convincing way to defend a currency as a store of value. If you have to posit that your money will still be there iff A, B, and C are true, then you're not going to park your money in that particular stall.
  - derefr 12y ago
    I'm not saying people should be putting money into Bitcoin now because they should assume A, B, and C will be true. What I'm saying is that there's no reason to assume that you won't see Bitcoin's value stabilize e.g. ten years from now, and Bitcoin become a useful store of value from that point forward. Or, to put it another way, just because the Bitcoin that exists today is a bad store of value, doesn't mean that "Bitcoin is a bad store of value" is an immutable fact about Bitcoin. It could just be a fact about today.
    - redthrowaway 12y ago
      Well, sure. PHP could also become a nice language to code in. Neither outcome seems likely, given what we've seen in the past.
- justincormack 12y ago
  It is worth nothing in that case. Why bitcoin not dogecoin or anything else? There is no special intrinsic value in bitcoin over the others, so there is still an infinite amount that can be made.
  - jasonisalive 12y ago
    Bitcoin because it was first. Bitcoin because it has the community, the attention, the history - in other words, the network effect. Bitcoin because it's not a clone. Bitcoin because other people choose Bitcoin. Etc. etc. Bitcoin because it has the initial gravitational advantage, and mass begets mass in the formation of stars.
- deleted 12y ago
  [deleted]
EricBlair 12y ago
"There are no grounds to say that BTC should be a superior store of value." No grounds... what hole did you emerge from? How about! The over 1800 currencies that have completely disappeared over the past several hundred years? hahahah. Or like, MATH. "it also has no central bank tending its value" Oh sweet Jesus... are you running fever? I don't think a central bank does what you think it does xD. and you probably work for one. "which is what gives fiat currencies value in forex markets." .... Just WOW. "It sucks at commerce and it sucks at investment." Instant, no fees, yep it sucks, you're right... Who said anything about investment? Oh you did, so should be look at the S&P500 today? History of the USD? So if a guy bought at $10, his investment is just terrible huh? No, you're thinking of the ones you buy at $1000 right? Sure, you can cherry pick like that. Got Enron stock then? Or tens of thousands of others? "I've yet to see a compelling case for BTC" I wouldn't wager any sort of coin, psychical or virtual that you've looked very hard. But that's ok because you can experience the joys of hyperinflation in the coming years.
honeybooboo123 12y ago
>> Aside from its very public history of being an absolutely abysmal store of value You're talking about something different now. Namely the effects of all the speculation, and for example governments figuring out if Bitcoin poses enough of a threat to them that they need to make it illegal, and so on. Will they shut it down? Will they not? Will they first make some money with it, and then shut it down? The point is that the wild fluctuations in Bitcoin's price you see are not proof that it's not a good store of value. It could well be, after stabilizing, if it ever does. A good store of value is something that could serve as a good medium of exchange too, like gold for example. Gold was used as money for ages, exactly because its characteristics made it suitable for that. It can't be printed by pressing a button somewhere, it's divisible, durable, and so on. Bitcoin has some of the same characteristics, and that's why it might well become a widely used medium of exchange. I bet something like it will. Central banks are not actually helping you. If you have a sound currency, it can't be printed, and central banks can't meddle with it. You see, printing a currency devalues it. If the pool of currency in circulation grows faster than the pool of wealth it can be exchanged for, then the currency loses some of its value relative to the wealth available. >> Bitcoin's sole value as a currency lies in its ease of use as a back-end for transactions. Fiat currencies' sole value lies in the fact that governments force us to pay taxes in them. Otherwise we'd all be using a sound currency instead, because it would be in our self-interest to do so.

derefr 12y ago

I think you're attacking somewhat of a weak-man: the people saying Bitcoin as it is valued right now is any sort of store of value (and there are, indeed, such people) are obviously slightly insane. But in a long-term sense—an imagined future where all the speculative value has gone out of Bitcoin and it is now just "worth what it is worth"—it would make a fairly good store of value, in exactly the same way gold would if we knew exactly how much of it there was to mine out of the earth, if some property of the (never-changing) extraction process meant that it was only able to be mined out at an exactly inverse-exponential rate, and if it were very easy to handle the resulting gold in 0.00000000001g pieces.

redthrowaway 12y ago
A store of value must be such over any given timeframe. If the balance in your savings account is worth $100 today, $50 in three months, $150 in six months, and $75 in a year, then it is a terrible store of value -- regardless of whether it's worth $200 two years from now. Similarly, talking about imagined futures is not a convincing way to defend a currency as a store of value. If you have to posit that your money will still be there iff A, B, and C are true, then you're not going to park your money in that particular stall.
- derefr 12y ago
  I'm not saying people should be putting money into Bitcoin now because they should assume A, B, and C will be true. What I'm saying is that there's no reason to assume that you won't see Bitcoin's value stabilize e.g. ten years from now, and Bitcoin become a useful store of value from that point forward. Or, to put it another way, just because the Bitcoin that exists today is a bad store of value, doesn't mean that "Bitcoin is a bad store of value" is an immutable fact about Bitcoin. It could just be a fact about today.
  - redthrowaway 12y ago
    Well, sure. PHP could also become a nice language to code in. Neither outcome seems likely, given what we've seen in the past.
justincormack 12y ago
It is worth nothing in that case. Why bitcoin not dogecoin or anything else? There is no special intrinsic value in bitcoin over the others, so there is still an infinite amount that can be made.
- jasonisalive 12y ago
  Bitcoin because it was first. Bitcoin because it has the community, the attention, the history - in other words, the network effect. Bitcoin because it's not a clone. Bitcoin because other people choose Bitcoin. Etc. etc. Bitcoin because it has the initial gravitational advantage, and mass begets mass in the formation of stars.
deleted 12y ago
[deleted]

EricBlair 12y ago

"There are no grounds to say that BTC should be a superior store of value." No grounds... what hole did you emerge from? How about! The over 1800 currencies that have completely disappeared over the past several hundred years? hahahah. Or like, MATH. "it also has no central bank tending its value" Oh sweet Jesus... are you running fever? I don't think a central bank does what you think it does xD. and you probably work for one. "which is what gives fiat currencies value in forex markets." .... Just WOW. "It sucks at commerce and it sucks at investment." Instant, no fees, yep it sucks, you're right... Who said anything about investment? Oh you did, so should be look at the S&P500 today? History of the USD? So if a guy bought at $10, his investment is just terrible huh? No, you're thinking of the ones you buy at $1000 right? Sure, you can cherry pick like that. Got Enron stock then? Or tens of thousands of others? "I've yet to see a compelling case for BTC" I wouldn't wager any sort of coin, psychical or virtual that you've looked very hard. But that's ok because you can experience the joys of hyperinflation in the coming years.

honeybooboo123 12y ago

>> Aside from its very public history of being an absolutely abysmal store of value You're talking about something different now. Namely the effects of all the speculation, and for example governments figuring out if Bitcoin poses enough of a threat to them that they need to make it illegal, and so on. Will they shut it down? Will they not? Will they first make some money with it, and then shut it down? The point is that the wild fluctuations in Bitcoin's price you see are not proof that it's not a good store of value. It could well be, after stabilizing, if it ever does. A good store of value is something that could serve as a good medium of exchange too, like gold for example. Gold was used as money for ages, exactly because its characteristics made it suitable for that. It can't be printed by pressing a button somewhere, it's divisible, durable, and so on. Bitcoin has some of the same characteristics, and that's why it might well become a widely used medium of exchange. I bet something like it will. Central banks are not actually helping you. If you have a sound currency, it can't be printed, and central banks can't meddle with it. You see, printing a currency devalues it. If the pool of currency in circulation grows faster than the pool of wealth it can be exchanged for, then the currency loses some of its value relative to the wealth available. >> Bitcoin's sole value as a currency lies in its ease of use as a back-end for transactions. Fiat currencies' sole value lies in the fact that governments force us to pay taxes in them. Otherwise we'd all be using a sound currency instead, because it would be in our self-interest to do so.