
Bitcoin Approaches $10,000 a piece - jeremyleach
http://www.bbc.co.uk/news/business-42135963
======
cs702

      Current market capitalization in US dollars:
      
      Global M2 money supply                  over $90.0 trillion [a]
      US dollar M2 money supply                    $13.8 trillion [b]
      Euro M2 money supply                         $13.2 trillion [c]
      All coins and banknotes in circulation        $7.6 trillion [d]
      All gold ever mined                           $7.1 trillion [e]
      Bitcoin                                 under $0.2 trillion [f]
    

The world needs these money-like assets to function everyday. Otherwise, the
global economy would ground to a halt.

Bitcoin has very different, unique characteristics compared to the other
money-like assets on the list. For example, like gold, Bitcoin's continued
existence doesn't depend on the good management of any national economy;
however, unlike gold, bitcoins are digital so they can be encrypted, backed
up, emailed, etc. Bitcoin is truly a new kind of money-like asset.

The trillion-dollar question is, to what extent does the world need a money-
like asset with Bitcoin's unique characteristics to function in the 21st
century?

[a] [http://money.visualcapitalist.com/worlds-money-markets-
one-v...](http://money.visualcapitalist.com/worlds-money-markets-one-
visualization-2017/)

[b]
[https://fred.stlouisfed.org/series/M2](https://fred.stlouisfed.org/series/M2)

[c]
[http://sdw.ecb.europa.eu/reports.do?node=1000003501](http://sdw.ecb.europa.eu/reports.do?node=1000003501)

[d] [http://money.visualcapitalist.com/worlds-money-markets-
one-v...](http://money.visualcapitalist.com/worlds-money-markets-one-
visualization-2017/)

[e] [https://www.fool.com/investing/2017/08/17/how-does-
bitcoins-...](https://www.fool.com/investing/2017/08/17/how-does-bitcoins-
market-cap-stack-up-next-to-gold.aspx)

[f]
[https://coinmarketcap.com/currencies/bitcoin/](https://coinmarketcap.com/currencies/bitcoin/)

------
shp0ngle
_Nobody_ actually uses bitcoin for payment.

There is more or less the same places where to spend it as there was 4, 5
years ago. And they all have about the same traffic, which is nearly zero.

Most people _only_ use it for speculation. This can't end well.

~~~
0bsidian
I'm going to repeat myself here, but please bear with me if you haven't heard
this argument before.

I respectfully disagree with the idea that Bitcoin's killer-app is to be used
as a currency for transactional purposes.

I can't really think of many reasons why you would use crypto to pay for a
coffee or a sandwich if you live in the West (or frankly, even most developing
nations).

On the other hand, I can definitely see the utility in a censorship-resistant
digital medium to store wealth. To me, this latter use case has much, much
more potential to serve the unbanked (as well as the banked).

Some use cases I can think off the top of my head:

(1) You are from Syria and need to flee war and escape into Europe – however
bank transfers into Europe are almost impossible if you are a common Syrian.
Bitcoin allows you to take your wealth with you, in your brain, as you escape
across the border, by just memorising your twelve word private key.

(2) You are from Venezuela or Zimbabwe – The government has issued capital
controls and is devaluing currency by the day. You transfer your wealth into
Bitcoin in order to offset capital erosion due to hyper-inflation. When the
situation stabilises, you transfer your Bitcoin back into fiat.

(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all
your assets in a political coup. If you have a portion of your wealth in
Bitcoin, you could protect them from government expropriation and anonymously
transfer them to associates or family members abroad.

(4) You are whistleblower Julian Assance and have been cut off from the
financial system as a way to censor your speech. Bitcoin allows you to have an
unbreakable digital "Swiss bank account" that the authorities are not able to
reach.

This reminds me of Peter Thiel's recent words about Bitcoin: "it's like a
reserve form of money, it's like gold, and it's just a store of value. You
don't need to use it to make payments."

Reference

[1]: [https://www.cnbc.com/2017/10/26/bitcoin-underestimated-
peter...](https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter-thiel-
says.html)

~~~
jstanley
> I can't really think of many reasons why you would use crypto to pay for a
> coffee or a sandwich if you live in the West

I can think of one: if you get paid in Bitcoin, having to buy some GBPs just
so you can buy a coffee or a sandwich is a hassle.

~~~
aninhumer
But getting paid in Bitcoin is already a way bigger hassle than getting paid
in GBP in the first place.

------
down
As the older generation doesn't get why you would buy a bitcoin and where you
would keep it, the newer generation doesn't get why you would buy a shiny
piece of metal as in gold bullion and where you would safely keep it.

Bitcoin market is still minuscule comparative to gold, and while most will
point out that it doesn't work amazing as a currency, if it gets to like 50%
of the current gold market, it is going to be worth a lot.

~~~
lsd5you
Yes, but bitcoin is not scarce in any meaningful sense in the long run. Using
the same software alternative versions of the coin can be created. Or worse
better versions ...

Gold will cease to be meaningfully scarce if we ever mine an asteroid or
something like this, but the barriers to that are obviously somewhat higher.

~~~
jay_neyer
Wrong. Bitcoin has a fixed supply of 21M bitcoins that will ever exist. I
could also create software alternatives of Facebook & Wikipedia, but they
would have no value. Network effects are what matter.

~~~
Cthulhu_
21M with fractions down to 0.00000000001, so while it's fixed it's also
fractionable to a very small number.

~~~
aninhumer
I'm not sure if this is the point you were making, but divisibility doesn't
make something less scarce, any more than being able to cut a gold brick into
nuggets means gold isn't scarce. A single Bitcoin remains exactly as scarce
regardless of how it is divided.

~~~
TYPE_FASTER
I don't think scarcity necessarily correlates directly to value. Land values
are a good example. New land is not getting created, you can subdivide it down
to small pieces, yet it's worth more in some areas.

Since Bitcoin is divisible down to a small fraction, and you can trade it for
whatever price you'd like, it makes more sense to me for the two parties
involved in a Bitcoin transaction to take some tiny fraction of a coin and use
that as a token to transfer the value from one party to another. You'd convert
fiat -> BTC fraction -> fiat almost immediately.

You would have the benefit of the decentralized network to make completing the
transaction much easier, and by using a fraction of a coin you'd remove risk
caused by exposure to fluctuations in the value of a whole BTC.

------
kompiuter
_There is also concern that Bitcoin could be vulnerable to hackers. Mr Ahmad
said that recently it lost almost 20% in value on fears it was being hacked._

Am I missing something or is the hacking part nonsense?

~~~
down
I think he confused with ETH, he also mentions south korea banning ICOs, which
has nothing to do with bitcoin.

~~~
edf13
There is a big confusion where all cryptocoins are read as bitcoin for many.

------
zipwitch
Bitcoin mania appears to be well underway.

Yes, bitcoin has uses. (Including some cool, elegant and potentially very
significant ones.) But despite the troubled state of the world, it does not
appear to me that anything has happened that would justify the current ongoing
explosion in price.

For an example of a mania in action, take a look at the price spike in tulip
bulbs in the early 1800s: [http://www.thebubblebubble.com/tulip-
mania/](http://www.thebubblebubble.com/tulip-mania/)

------
paulus_magnus2
To people who believe it's not a bubble. Please explain what wasn't priced in
yesterday that warranted +17% today.

~~~
cwkoss
In 20 years, Bitcoin will either be worth $0 or $350k. (Stability and history
to become a safe-haven asset something like gold.)

People don't think that the network today is +17% more valuable, but rather
that the chance of Bitcoin going to zero in the next 20 years is 17% less.

Institutional investors building positions in Bitcoin makes a strong case for
long-term viability, because if the govt tries to mess with something in
everyone's mutual fund, the financial lobbyists will push back strongly.

------
wimagguc
The previous discussion with Bitcoin crossing $9,000 is still warm (posted
19hs ago) at:
[https://news.ycombinator.com/item?id=15782222](https://news.ycombinator.com/item?id=15782222)

Do we have anything new to add at each 1K step announcement?

------
sreyaNotfilc
I feel its too late for me to buy in and to get any value out of Bitcoin. 3
years ago (when it was around $350 per coin) I asked my friend about buying
one up and I received a pretty good reason not to jump in.

3 years later and it looked like I made the wrong choice. I don't have $10,000
just hanging around to buy into one whole coin.

Oh well...

~~~
dagw
It's just as easy to buy $350 worth of bitcoin today as it was 3 years ago.
There is no real reason or advantage to buying whole coins.

------
Geenirvana
I am a bit on the fence with Bitcoin.

A few years ago I brought a little bit of altcoin and 'believed' in it. I only
put a small amount but I still was nervous spending money on some 'pretend'
digital asset. Within a few days it was worth half what I started with.
Thinking I was in a low point of the chart, I invested a little bit more.

It then dropped again, so much I lost around 80% of the value within a week.

I then declared the money lost and saved my private keys.

Fast forward to the beginning of this year, I randomly picked up my private
key from a backup drive that I was going to wipe and decided to check it's
value.. around £15

As it was such a little amount I decided just to cash it out, buy a pizza and
continue with my life. However, as it wasn't so straight forward to just 'cash
out' I left it.

A few months later I hear the news that bitcoin is rising so checked on my
altcoin (because the altcoin charts followed closely to the bitcoin charts),
and there you go, I tripled my initial investment. I still declared the coins
'dead' so wasn't worried about losing it, but converted them into bitcoin as
that felt most secure to me. The conversion lost me some percent but I stuck
it out and have had 0.1BTC in my wallet since.

It's nice watching my little amount go up. It's not a deal breaker if I lost
it, but it's now more 'alive' than 'dead' to a point I have started thinking
about converting it into fiat and enjoy a good Christmas. But there is that
little bit inside me now, that refuses to listen to my 'the coins are dead,
and I wouldn't really lose anything' mentality which is unfortunate because I
feel as the price goes up that feeling will cement harder to a point I would
never cash it out.

------
sensecall
I get the feeling a lot of people are going to get a very nasty shock in the
not too distant future.

Other than buying purely for speculation, does Bitcoin really have any purpose
right now, at scale? Geniunely curious.

~~~
jstanley
Bitcoin is the world's first way to send money to anybody else, anywhere in
the world, almost instantaneously, without asking permission from anybody, and
without trusting any intermediary.

That's huge. Bitcoin is to money what the internet was to communications.

~~~
soVeryTired
But I do trust intermediaries. Intermediaries are fine. And I think it's
appropriate that large international transactions should be scrutinised by
authorities.

------
tomconte
I think most people buy Bitcoin for its speculative value but never use it as
a currency to actually buy or sell stuff.

~~~
jstanley
I use it as a currency to both buy and sell stuff.

~~~
ComputerGuru
If the gp had said “no one uses it to...” your anecdotal sample of one
response would have been sufficient to disprove the claim. However, it is at
best anecdotal and at worst completely irrelevant to the actual claim made
(i.e. that _most_ BTC users are investing in the currency).

------
189723234
I feel that bitcoin is unstoppable.

It offers massive, tangible benefits. Money that is not controlled by corrupt
institutions completely changes the game.

There is an entire industry being built around it. Thousands of engineers are
creating new businesses as we speak.

It has different properties to stocks. The more people that convert their
money to bitcoin, the more use it has. This is a basic property of currency.
While people will say you can't buy much with it now, the very fact that
massive amounts of people are now acquiring bitcoin gives incentive to people
to start accepting bitcoin as a form of payment.

Most governments can now no longer make it illegal. The horse has bolted. By
the time it is made illegal, millions of people will have bitcoin and you will
be committing political suicide. They will try to regulate it in a way that
benefits large corporations though.

I believe the transfer of money away from questionable stocks like facebook,
into something based on real value like bitcoin, will crash the share market.

~~~
zby
The problem is that bitcoin cannot be a currency - because it cannot
facilitate more than 7 transactions per second, this is many orders of
magnitude not enough for a currency. It can be something similar to gold -
mostly a value store. But personally I have doubts - first of all the energy
costs are crazy. I think it will be eventually replaced by a POS coin -
proving that the value store function of something that new is not very
reliable.

[https://medium.com/@zby/proof-of-
work-8d8265def194](https://medium.com/@zby/proof-of-work-8d8265def194)

~~~
jstanley
7 transactions per second isn't enough for it to be an everyday currency for
everyone.

It's certainly enough to be an everyday currency for the people who want to
use it as an everyday currency at the moment, and Lightning Network will
expand the capability massively.

