Seeing so many comments (some here, but in general everywhere) still trying to argue and convince people that BTC has no value and you might as well burn your money.
BTC has been around for a decade, how many more decades does it need to be around before people will admit that hey, maybe, for some reason, this has some sort of value?
People still arguing that BTC has no use.. 10 years of usage, adoption, and rising value would seem to offer a different opinion.
Is it going to be around forever? Who knows. Maybe it goes bust tomorrow, I don't know.
What I do know is this: people are willing to buy it, sell it, and trade for it. The value goes up and down. To me, that makes it a currency that you may be able to invest some money into. Maybe you make some money, maybe you don't.
I would even argue BTC falls under the traditional definition of invest, which is:
>expend money with the expectation of achieving a profit or material result by putting it into financial schemes,
When people buy BTC, they are expecting to achieve a profit. BTC is a financial scheme. Seems fairly cut and dry to me.
Ok, what can I buy with BTC vs what can I buy with USD? BTC is useless in comparison.
What exactly do people mean when they say they expect to make money on BTC? Do they mean they’ll get more BTC, or that they can sell it for USD or some other currency? Why do you think that is?
Do you want a literal list of things you can do with BTC? I feel like your trying to draw me into an argument I never made. I don't think BTC is going to replace USD, I never said it's going to replace USD. But you're in an alternate reality if you don't think people are doing anything with it. What do you think people are doing with BTC? Just buying it and putting it into cold storage forever?
And again, your second question is just baiting for an argument I never made. Of course I mean relative to fiat currency, what else would I have meant?
Ok, what legitimate, legal use does BTC have where it has an actual advantage over USD, then? If there is none, then that’s what I mean by “BTC is useless.”
My second question was getting at precisely the same point: that fiat currency is strictly superior to BTC.
If you can’t provide a single legitimate use for it other than as a magical money machine, I would take that as evidence that it’s useless.
It's odd that if something doesn't have an advantage over something else that it's immediately useless. I also don't know where you think I said that BTC is superior? Something doesn't need to be superior to have a use.
Why do you keep moving the goalposts? First, it's completely useless. Now it might have a use, but if it's not superior it might as well be useless. Oh, and now it has to be legal (in the USA? Mexico? Russia?).
To indulge you, here's a transfer of 194k BTC for $0.00[1]. How much would your bank charge you for an international wire transfer of a few hundred million dollars or more?
I never said BTC was superior, in any way, in any form. I never said BTC was a replacement for USD. I never said BTC was going to replace any fiat currency. I never said that BTC is suprior than USD for legal purposes.
Literally, the only thing I said was that BTC has a use, some people obviously think it has value, and semantically it falls under the definition of invest.
How you managed to drag me into an argument about the legality of BTC and how it's superior to USD - all things I never said or claimed - is actually really astonishing.
>No, the goal posts are right where you last saw them; your field goal was just blocked.
That was one of the funniest things I've read all day (sincerely), so thanks for that.
I would just comment that you started with:
>You said people were arguing BTC had no use. I’m asking what I can use it for?
And ended with
>I am saying that USD is strictly superior to BTC for all legitimate/legal use cases. If you want to hide assets or buy cocaine, BTC might be better, sure. But, otherwise it’s like comparing a 1980s computer to one from today.
If that's you "blocking", cool. We have different opinions on what the phrase "moving the goal posts" is, I guess.
>As for “legal,” you know damn well what it means: can I be prosecuted successfully for what I’m about to do? If not, it’s legal.
Laws are different in different countries. What you can be successfully prosecuted in one country for is completely legal in others.
Bitcoin is not an investment. It has no underlying rate of return. When you invest in stocks you get dividends. When you invest in bonds you collect coupons. When you invest in real estate you collect rent. Bitcoin is speculation. You are just hoping somebody comes.along and pays more for it than you did. In that sense it's more like gold and silver.
People use the terms "invest" and "speculate" interchangeably, or they try to suggest that an "investment" has a lower risk than a "speculation," but your disambiguation is the correct one and it is vital to understand the difference between:
1. Putting money into something that generates a return of some kind, and which may also be sold to someone else, and;
2. Putting money into something where the only return you get is from selling it to someone else for more money.
Both practices can even involve the same kind of entity: If you buy a condominium and live in it, it is an investment. Your use of the property as a home is a return. If you rent it out, it is more obviously an investment.
Whereas, if you buy an empty plot of land and do not use it or rent it out as a parking lot/whatever, you are speculating in real estate.
This strikes me as a somewhat semantic argument. Many stocks don't pay dividends. Flipping houses would also fall outside of your definition of investing. Buying gold has also been a relatively safe "investment" strategy as well, speculation or not.
Every form of investment is, at its core, speculation on some level. If i pour my savings into Apple and they tank, the dividends would pale in comparison to my losses.
Every asset that produces an Income or has a possibility of producing income in the future is an investment. Everything else is speculation.
Buying a commercial property and renting it out is an investment. Buying a house in the hope of selling it for more in the future is not investment.
Same goes for Gold, Bitcoin, momentum trading in stocks in not investment. Buying a stock that does not pay dividend but is a real business that produces something is an investment.
By that definition startup investors are speculators not “investors”. That seems like an overly narrow definition of the word, compared to how it’s normally used.
I like your definitions but it seems [buying] stock that pays no dividend (despite the business behind it) is still speculation. At best you can hope it will pay a dividend some day, which is speculation.
I think you are confusing risk with speculation. Every investment has risks associated with it. Even if a stock pays dividend does not mean it will keep paying it for perpetuity. Nothing is guaranteed.
Stocks that don't pay dividends are absolutely speculations.
Flipping houses is absolutely speculating in real estate if you neither occupy them nor rent them out during the time you own them.
Not all forms of investment are speculations at some level. If I own a landscaping business and invest in a truck, I can drive it until it goes to the junkyard. I generate a return that hopefully offsets the depreciation, and I might not get even a dollar for it when I'm done... I may even have to pay to get it towed away.
And stocks that do pay dividends are also speculations because they might cut the divi the day you buy them, or their price might crash, or they might go bust.
All investment is speculation. Bitcoin is no different in that regard to stocks of any kind.
Exactly. I tend to phrase this as “BTC has no fundamentals.” Stocks go up because profits go up along with GDP (this is the reason non-dividend paying stocks are also investments). None of this applies to BTC.
There is a widely held sentiment among "serious" bitcoiners that the entire financial system will ultimately cede to cryptocurrency, with bitcoin on top, and it is at this point they expect to rent-seek the utter bejeezus out of the rest of society. goes by the meme "hyperbitcoinization"
However, there is a system that is evolving to generate returns for your open lightning network channels. They do generate small amount of returns. [0]
You're half way there. Investments promise a return to investors by creating value, or that's the goal, at least. Speculation does not create value; commodities, options, and shorting do not create value, they are zero-sum.
Some consider a store of value to be an investment (like, as you mentioned, gold or silver). Unlike gold or silver, though, there's a hard limit to the number of bitcoin that will ever be mined. It's not inconceivable that in the not too distant future we'll mine gold/silver/other precious metals from space, and prices will plummet.
Bitcoin can certainly provide dividends, not necessarily in the traditional sense, via future hard forks. Anyone who has held bitcoin in the last 2 years or so have already received equivalent amount of Bitcoin Cash and Bitcoin SV. Those chains can, in turn, hard fork, and assuming you have held you'd receive equivalent amounts of those forks, and so on.
You left out transaction fees. Factor that in, and transferring directly via USD is simpler, more secure (if not technically, then via insurance), and probably cheaper.
Pay attention, because you’ll miss it if you don’t up your game, apparently. “Hodler” doesn’t make money here. She loses. Losing $0 is superior to losing $X for any X > 0.
Hodler will obviously only make the trade when the spread is larger than the transaction costs. The question is why would Alice and Bob be willing to pay, but the reality is that some are. Whether it be by pure foolishness or because your theory is simply incomplete.
Once thing I've noticed about Bitcoin is that there are many "alt-coins" that seem to deliver better on Bitcoin's promises from a technical perspective, but those coins are forever stuck in Bitcoin's shadow because BTC has that first-mover advantage. And as a currency, the first-mover advantage is HUGE, because who wants to convert their investments from a hugely popular coin to one that could disappear tomorrow?
So everyone seems stuck -- we agree cryptocurrency can be an amazing idea, and the first version of it is something of a technical (and economic?) miracle, but now we're stuck with the V1 flaws forever (unless the group governing it decides to 'fix' those flaws, but there's another issue, I don't want you messing with how my money works...)
What first mover advantages does it have exactly? I know many people who have bought bitcoins, but absolutely zero people who use it in their day to day lives.
The first mover advantage in this case is the fact that early adopters of crypto bought BTC, because BTC was all there was.
Now that those people already have BTC, they are less likely to purchase a second coin. For one, they already have money invested in the space. Secondly, BTC has shown that it has staying power - outlasting many altcoins which came after it - which further solidifies BTC as the top contender (for now).
So, those already invested in BTC have little impetus to change from BTC to another coin == a first mover advantage.
Isn't it just as plausible that early adopters bought BTC because that's all there was, then bought altcoins as they appeared in order to diversify their crypto portfolio? It'd be interesting to find out if there are more investors in "crypto" as a strategy versus BTC specifically.
I mean, of course that's plausible. If I gave the impression that it wasn't, my bad. I was just hoping to clarify to eugeniub why BTC enjoys a first mover advantage, and why first mover advantage has nothing to do with how often "people use it in their everyday lives".
Assuming a limited amount of resources to invest, someone who is already invested in X, is less likely to remove their money from that and invest into Y, unless Y is really good. All things equal, there is no reason to move from X to Y if X came first and you already invested into X.
So, the first mover advantage for BTC is the fact that new coins need not only be equal (in the eyes of the investor) to BTC, but better enough to convince that investor to move out of BTC in favor of that coin. People who are, in addition, buying other alt coins are still solidifying BTC's first mover advantage if they do not remove their investment in BTC in favor of something else.
Bitcoin's governance model is what makes it special.
1) The founder declared it would have a maximum of 21 million coins with a set mining schedule
2) Many/most of the people who bought into it implicitly agreed that this is the core feature of bitcoin - that it would only ever have 21 million coins
3) The founder disappeared/died/whatever
4) Now, everyone continues to agree on the 21 million coin cap. If anyone tries to change this, they are opposing the founder and the reason many people bought bitcoin. At that point bitcoin will become the most used chain that maintains the set 21 million cap
This lack of governance as well as scarcity consensus is by far the strongest mechanism to maintain a scarce supply that we have in existence. It is not totally infallible - maybe a superhuman AI could social engineer the entire bitcoin community to increase the cap. But it is the best I can imagine is possible. The network effect of more people buying into it makes that 21 million meme stronger and stronger, and satoshi being "gone" reduces the risk that he comes back and declares that he has "changed his mind". Even if he did do that the core 21 million devotees will fork the coin to a 21 million and that will be the truly scarce bitcoin.
Therefore, this is the most securely scarce asset in existence.
The inflation is fair, in the sense that it is well known. It is also fair in the sense that nobody decides who gets the newly minted coins, everyone has an equal chance.
There is no creator still around. Nobody can dictate any changes to the rules. Sure, development is still ongoing, but if a change does not have close to unanimous consensus it's not going in. There seems to be a general understanding that unless this is so the community would be splintered which not make for a working economy and everyone would lose. Game theory holds this system in place.
(There have been a few coins which mostly shares Bitcoin's history, but so far the market seems to treat them as separate projects in their own right and valued separately, which so far seems to validate that theory.)
Not many other projects have managed to replicate the above (although some come close), so talking in terms of first mover advantage is selling the project a bit short.
You've accidentally stumbled upon the Bitcoin's true strength in your own answer.
> unless the group governing it decides to 'fix' those flaws, but there's another issue, I don't want you messing with how my money works...
That's exactly the reason why arguably technically superior projects are worth less - they are constantly messing with how their money works.
The community around Bitcoin, it's so called "immune system" is incredibly conservative. All they care about is stability and security. Every new feature is being introduced as an opt-in soft fork. It can take around 3 years of rigorous testing and discussion to go from a BIP to a protocol upgrade. Yes, other projects may be technologically superior, but it doesn't matter because they are funny money and Bitcoin's rigor and resistance to change make it hard money.
This is inaccurate. Bitcoin could handle many, many more transactions per second than it currently does with less risk and technical complexity than has been introduced since we hit the blocksize limit in 2017. There's a lot of money making sure it does not get bigger. Instead it's being rate limited with high fees and limited throughput to force transactions onto "layer 2" systems that allow 3rd party companies (ironically acting like banks) to extract fees. This is what caused most of the original Bitcoin community to fork off to Bitcoin Cash, which has improved upon the original code base and proven Bitcoin can handle far more transactions per second.
While it's hard to define what the "original" Bitcoin community really is, you'd struggle to make up a definition under which the above is true.
Looking through the commit log, none of the developers match any known Bitcoin developers at all, neither past nor present. It's hard to know for certain of course since there are many pseudonymous developers in this space.
A large reason might be that drumming up interest in consensus breaking changes is difficult enough as it is, and interest in a completely different codebase with incompatible rules is likely to be even harder.
Calling the development team "incredibly conservative" isn't accurate. The idea of Bitcoin is peer to peer electronic cash directly between two counterparties. The current roadmap doesn't focus on that as a priority and instead focuses on intermediaries for scaling. That isn't "incredibly conservative", it's a different system of priorities entirely, that have little to do with technical risk or original vision of Bitcoin.
Blockstream launched the Liquid Network sidechain fairly recently.[0] The features that distinguish it from the Bitcoin main chain are fast settlement times (1-minute blocks), confidential transactions (versus BTC's transparent txs), and the ability to issue unique assets such as tokenized fiat, crypto assets, and other pretty exciting digitized assets.
I have never thought of bitcoin as a currency -- it is clearly some kind of commodity given that it is modeled after gold. Yes, we do want stability in prices denominated in currencies.
Not one word here about why BTC should be worth anything at all. Who cares if someone spent time and electricity to mine it?
The USD is, along with every other major, government-backed currency, already an almost 100% digital currency. I don’t see any advantage there. In fact, BTC has the disadvantage of no major government backing it.
If nobody is required to accept it, and I can’t do anything with it otherwise, what good is it?
What exactly does it mean when people say that a currency is backed by a government? ”Backed” to me implies, e.g., redeemable for gold which is clearly not the case for the US dollar. Is it that the government issue bonds denominated in that currency? But that has nothing to do with the money supply per se...?
The US government accepts payment for taxes in USD. Even if an American wants nothing to do with USD, and conducts all their exchanges through bartering, they will need to acquire some at some point in order to make tax payments. The value of USD can't fall to 0 as long as the federal government retains the ability to impose taxes.
So do cryptocurrencies acquire their value through market demand. For example, XRP is the cheapest and fastest way of sending money between the EU and China. Standard wire payment would not arrive before Monday the earliest, but XRP is there in seconds for a fraction of a cent.
In military, even a pack of cigarettes functions well as a currency. It does not need to be government-backed. It needs some kind of useful property to ensure demand.
That sounds like a strange argument. Nobody can pay their taxes in gold, still gold has a value, right? And on the other hand, the value of the USD can fall to practically zero, as it happened to many other currencies before, despite the governments of the respective countries imposing taxes in those currencies.
Bitcoins are, of course, nothing. But it's a nothing that is pretty guaranteed to stay, to be in rigidly limited supply, and that is easily exchangeable. People give it a value that depends on their expectations of other people's willingness to buy them. Would you buy 10 bitcoins from me at $1000 each? I bet you would without hesitation. We're talking of giving a $1k value to something that is useless and completely immaterial, yet you just know it's an excellent deal.
Gold has value because it’s useful, among other things. That base level of value is why people started making coins out of it in the first place. It’s properties as a physical metal make it easy to store, transport, and protect, all of which are good properties to have as a currency.
Industrial demand is only half the story. The value of gold also lies within the fact that unlike fiat currency, it cannot be created out of thin air. Global stockpiles of gold are well known, annual production is small and predictable.
This means that if you sell a car for gold, you can expect that gold to be worth the value of a car a year or two from now. Fiat money does not offer such assurance, it can lose most of its value almost overnight if government turns on printing presses or fucks up in some other way (see Turkish lira or Venezuelan bolivar).
Cryptocurrencies mimick the same properties of gold. Their "base value" comes from the speed/ease of transactions and other useful features (eg cannot be confiscated). Their supply is algorithmically limited and well-known in advance.
Industrial demand isn’t the entire source of gold’s value, that’s true. I was more referring to it’s usefuln being the source of its value 2700 years ago when people started making coins out of it.
I would argue that, beyond industrial demand and use in jewelry, the thing driving the price is primarily speculation.
> ...if you sell a car for gold, you can expect that gold to be worth the value of a car a year or two from now.
Re:your criticism of fiat money, I would accept that if I lived in Venezuela, Zimbabwe, or Turkey. But, I’m talking about specifically the USD and other established currencies such as GBP and EUR. There is literally no danger that the US, UK, or EU is going to experience hyperinflation short of near total governmental collapse.
> What you’re saying is that the car to gold ratio should be constant if your understanding is correct, right?
No. I am aware that the value of gold fluctuates, but it is safer than many national currencies, stocks of failing companies or overvalued real-estate. The amount of gold in the world is known and stable and there's no way to massively "print" gold to crash its value. This stable supply is mimicked by algorithms built into cryptocurrencies. As long as there is demand for a something, and there is limited supply of it, it will be worth >0. Cryptocurrencies satisfy both requirements: they are limited in supply and have demand because of their usefulness (fast & cheap transactions).
> Re:your criticism of fiat money, I would accept that if I lived in Venezuela, Zimbabwe, or Turkey. But, I’m talking about specifically the USD and other established currencies such as GBP and EUR. There is literally no danger that the US, UK, or EU is going to experience hyperinflation short of near total governmental collapse.
No need for hypotheticals. The government of Cyprus confiscated 47.5% of all holdings above 100 000 EUR in 2013 during its banking crisis. https://eu.usatoday.com/story/money/business/2013/07/29/bank... Cyprus is full member of the EU and Eurozone, so these risks are not limited to corrupt and failing third-world countries.
> Oh, and if you think BTC can’t be confiscated, I have news for you:
Most cryptocurrencies cannot be confiscated by network nodes like traditional banking institutions can freeze or rewrite payments and accounts (see Cyprus above). Only the one who has private keys controls the assets. This is a major feature.
I thought that was still responding to the stability of the Euro. You’re right that if I had 300k EUR in a single, uninsured bank account, the government could confiscate it. That still doesn’t address the fact that BTC can be confiscated, as I pointed out previously.
You could have also taken the prudent measure of not having that much money in a single bank account.
> That still doesn’t address the fact that BTC can be confiscated, as I pointed out previously.
No, it cannot. No government can issue an order to seize 47.5% of everything over 10 BTC (ca 100k EUR) from a list of accounts. Third parties cannot freeze cryptocurrency accounts or rewrite their balances. That's the major innovation of distributed ledgers (blockchain).
This is a fundamental difference compared to traditional banking where account balances are just fields in a writable database.
At best, they can seize private keys that control accounts, but to achieve that, they must confiscate personal devices (phones, tablets, computers) and examine each of them with forensic tools. This is not viable on a large scale, especially when considering that private keys are easy to hide with plausible deniability (using encryption, steganography, memorization, etc).
News stories about "confiscated" cryptocurrency are nothing more than private keys found on seized computers. No-one can take control over any account by any other means.
> No-one can take control over any account by any other means.
I see. I suppose if the US government orders, say, Coinbase, to turn over control of someone’s account, they won’t do it? You have an example of that happening, right?
Coinbase has no control over any cryptocurrency accounts besides their own.
Each cryptocurrency user generates a private key that becomes a wallet and is used to sign transactions. These signed transactions are then broadcast to the internet for balance keeping nodes to keep track of. They do it in a globally distributed manner (no central entity) and earn rewards for their work (like collecting a tiny fraction of the transaction as a fee).
You didn't answer my question. Things have a value because people value them. Nothing has an "intrinsic" value, not bitcoins, not gold, not dollars, not food. I am not a bitcoin fanboy, but I find strange that many seem unable to grasp the fact that most of the value of anything lies in the willingness of other people to give us something in exchange for it, not in the good itself.
Things do have intrinsic value based on their utility. Would you say food has value because it keeps you alive, or does your life also have no value? Could it be that you’re willing to trade USD for a quantity of food because the food is more useful?
I never said food was an investment. I said it has value. Big difference.
As for buying BTC, you’re clearly not paying attention to my comments here. ;) The only reason I would want 10 BTC is to immediately sell them to some sucker for more than I paid for them.
So, yes, I would buy 10 BTC from you at a very steep discount, but not at the market price.
Backed by a government means that it's backed by the ability of a government to tax work and production happening in the country.
Every year the US government collects about 25% of all economic activity as taxes payable only in USD. Every person and business in the country must sell on average 25% of their productive output for USD, and you can buy all those things with USD.
> What exactly does it mean when people say that a currency is backed by a government?
I think the de facto meaning of backed, despite what people say about gold/silver/etc is actually this:
American dollars have value because the US Government taxes things, like land, and if you do not pay those taxes they will send you mean letters (trust me) before resorting to other means (trust Al Capone). You pay these taxes in US dollars. You just having dollars does not make them valuable. And dollars are not valuable because they are backed by gold or silver or sea shells. What makes dollars valuable is that the government wants them back.
The Zimbabwe government forced everyone to use their currency (Zimbabwe dollar, up until 2008 iirc, pretty sure they still have problems today...). Of course forcing everyone to use this currency created artificial demand for it. However, I don't see why adding "artificial demand" is an argument against bitcoin.
EDIT: But sure, if government-backed means they force people to accept the currency, then it will have value. I don't see this as a good selling point though. Not trying to be sarcastic.
In addition to the other responses here, the US government (through FDIC) guarantees that you won't lose your money in a bank account if something bad happens to the bank. That's a lot more important than most people give credit for.
That gives value to the banks, not to the currency. I could create my own currency and give you the exact same guarantees as the FDIC (since I can always print more), yet that wouldn't give it value, because all you get is more units of the same thing.
If you disagree, I have some $IBs to sell you, and an insured account to store them!
No, it doesn’t give value to the banks. Banks only have value because you can use them to store and borrow money which has value. Your theoretical bank has no value because your theoretical currency does not, either. FDIC insurance reinforces the value that banks (and the currency one can access through them) already have.
I agree, right now Bitcoin and other cryptocurrencies are nothing more than pure speculative assets. Until they're completely decoupled from other currencies and are used as a real national/international currency, I'll stand here wondering what the hell is going on with all of this.
It's proven to be very, very useful for anonymous blackmail à la Cryptolocker. Also quite useful for buying all sorts of contraband, from guns to drugs.
"It’s a gambling device… there’s been a lot of frauds connected with it. There’s been disappearances, so there’s a lot lost on it. Bitcoin hasn’t produced anything."
But it's a good gambling device and people like to gamble. I both think it's kind of nuts and hold a few bitcoins.
Warren Buffet is biased and ignorant. I'd give an arm to hear what he said about Google, FB and other dotcoms when he passed on investing in the 2000's
He's always used to say he didn't understand tech and was sticking to things he understood. Which has served him well though he now is invested in Apple and regrets missing Amazon.
> Not one word here about why BTC should be worth anything at all.
There's no "should". Moral theories about the propriety of the value of currencies are not material. Bitcoin has value because people are willing to trade valuable stuff for it
“Should” is not a moral judgement. Substitute the word “logically,” if you want.
What can you buy with BTC besides drugs and the occasional coffee at a Silicon Valley coffee shop? How does that compare to what you can buy with USD? Call me when you can buy a house with BTC reliably.
Are you saying nothing has value unless it can be directly and reliably used to buy houses?
If you're saying "BTC is less useful than some other currencies", then I don't disagree, but then you should have said that in the first place, rather than motte-and-baileying.
Nice straw man. I’m saying it’s value is equal to its utility for facilitating transactions, and there’s nothing worthwhile you can buy with it. If I can’t buy a pizza, a bus ticket, a TV, a house, a car, a beer, or dinner with it, then what good is it?
Most people bought during the peak, that's why it was a peak.
As any other pyramidal Scheme the only way to win is to be there first. Later on you are just trying to put other people into the scheme to regain some losses.
Short answer: hell no. What gives currency value is how often people use said currency to purchase goods, nobody uses Bitcoin, not to the extent of any real currencies anyways.
Gold has practical, useful applications. Bitcoin is pretty much wishful thinking at best. I’m not sure if bitcoin is worth the CO2 emissions mining it created.
No, gold is not a currency (anymore). Gold is an asset. Gold is rare. Gold has real world use. Gold can be used for many things. Gold can be purchased with money to be worn or used.
So no, by that logic, gold shouldn't be worthless at all. You're comparing two different things.
Usually countries without access to financial markets(i.e Syria,
Iran, Venezuela).
The credit rating of countries is based on their gold reserves as well so if you have gold you get cheaper loans.
[I now see I mispelled "gold" as "good" in my comment, my bad]
As far as I know, none of those countries promises to redeem bearers of banknotes with an equivalent value in gold, which is what being on a gold standard means[1].
Plenty of central banks have gold reserves, that's basically a vestige from the past, but that's not the same as saying the currency is backed by gold.
Bitcoin is not a commodity. Commodities have a real word purpose. Gold has inherent value by its uses. That's why you pay a damn fortune to acquire it. What real world use has Bitcoin ? None.
Any article which talks about Bitcoin as an investment without mentioning (at least in passing) the currently unregulated exchanges and the role of Tether in the price, is missing a large part of the picture.
The current set of exchanges which are setting the price are totally unregulated banks (effectively) and with Tether (a "stablecoin" that isn't 1:1 backed and which has been rapidly inflating it's supply) there are significant concerns about how much of the price is really reflective of demand.
Bitcoin forces reexamination of custody issues from first principles.
Do countries smaller than the largest 100 corporations really need their own central banks ? And if they are themselves consumers of the ecb or the fed, they have custody issues also.
Democracy is the custody of people’s power with elected representatives. With immigration people can reallocate the custody of that power.
Not all people need 100% 3rd party custody of money.
Also, bitcoin makes it easy to detect theft and audit 3rd parties more easily.
I'm starting to turn the corner on this; if you can pick it up on one of its lows, which are pretty extreme as far as I know, like 1/4 of peak, and hold without regard for daily movement, you will probably make money.
I think Bitcoin is largely taking value from individuals trying to stash money pilfered from the public in some way (usually through their public offices, but sometimes through embezzlement, theft, or a previous illegal accumulation that has to be moved in the face of imminent arrest), and opportunities for this sort of large-scale theft come rarely. So upward movements are caused by small groups and happen very quickly. After the theft is made, the first priority is to get the money out of the country (or tied for first with getting your children out of the country), then to get one's self out of the country. The tolerance for loss in exfiltrating this cash is virtually unlimited, in exchange for speed.
Small pops and falls caused by individual incidents will sometimes coincide making a larger pop, and periodically some legal loophole (or prosecution pressure) will open up in come country that puts a lot of people in this situation at the same time. This is inevitable. The small pops are muted due to the selling of previous market moving buyers. The big pops are virtuous circles; they exhaust the supply of previous smugglers, who cash out, and the resulting acceleration in the upward price movement filters to the media, where knife-catchers step in. You probably want to time your sales to the knife-catchers, anticipating the first articles reporting on the price rise.
There will always be western countries where you can cash out. There's no way to suppress a currency designed for money laundering in a west that is entirely financial services and intellectual property; there will always be some official that can be bribed, or a country that needs the tax receipts. Bitcoin can do to nations what Uber and AirBnB do to cities.
I'd bet the floor on bitcoin would probably be a good measure to determine growth in the general world corruption rate; the more good pops, the more people feel like they can hold a little bit longer.
Think of cartels burying cash in fields, and how much they'd be willing to pay to make it spendable. The only other option is to burn it. Going into business to help them from the comfort of your living room is not a bad business.
This article is not good, though, just nonsense reassurance mostly (bitcoin is small, but things that become big start small, so bitcoin will be big.) Worse, the more large institutions are holding bitcoin, the less benefit for individual investors, not more, because they'll absorb the big pops, and do it in a way that they end up holding an optimum amount of BTC all the time using their international nature and their ability to shift losses to offset gains for tax purposes (in short, regulatory arbitrage.) Bitcoin could ultimately end up as an exclusive partnership between thieves avoiding capture and banks avoiding taxes. A sort of high-speed virtualized real estate.
BTC has been around for a decade, how many more decades does it need to be around before people will admit that hey, maybe, for some reason, this has some sort of value?
People still arguing that BTC has no use.. 10 years of usage, adoption, and rising value would seem to offer a different opinion.
Is it going to be around forever? Who knows. Maybe it goes bust tomorrow, I don't know.
What I do know is this: people are willing to buy it, sell it, and trade for it. The value goes up and down. To me, that makes it a currency that you may be able to invest some money into. Maybe you make some money, maybe you don't.
I would even argue BTC falls under the traditional definition of invest, which is:
>expend money with the expectation of achieving a profit or material result by putting it into financial schemes,
When people buy BTC, they are expecting to achieve a profit. BTC is a financial scheme. Seems fairly cut and dry to me.