I dunno, I suppose one wouldn't be surprised if a gold conference didn't accept gold payments.
That is, in its current form, Bitcoin is _terrible_ for general transactions. However, given its tremendous market capitalization, it may yet turn out to be a viable way to store value.
> However, given its tremendous market capitalization, it may yet turn out to be a viable way to store value.
The circular logic of bitcoin shysters never ceases to amaze.
I have created a new coin called "sand coin". Each coin is a grain of sand from my backyard Yesterday my friend bought one grain of sand from me for $1. Therefore, given the fact that there is billions of sand grains in my backyard, their market cap is giant. Given its tremendous market cap, Sandcoin is a great store of value.
Every day, $33 billion dollars worth of "traditional" currencies are traded for $33 billion dollars worth of cryptocurrencies[1]. Coinbase, the top bitcoin exchange, is the 5th largest personal finance site in the US[2] -- the only bigger ones are chase.com, paypal.com, wellsfargo.com, and bankofamerica.com -- and Coinbase is rapidly closing the gap and is on track to overtake all of them within 6 months [3].
This is nothing like the "sand coin" from your example. It's real, measurable economic activity on a massive scale.
> It's real, measurable economic activity on a massive scale.
What economic activity? It is people speculating. Nobody is using bitcoin for buying coffee or sending micropayments to websites. Nobody is using it as a "store of value", despite what the shysters say. It is just people buying and selling a meaningless ticker symbol hoping to get rich and buy some island in the south pacific (using fiat, I might add).
With bitcoin, you might as well just throw away the technology behind it and just trade on the BTC ticker instead. I mean, that is almost what is happening given all the trades on any given exchange are off-chain transactions happening in a centralized exchange-owned database. There is no rumbling of miners recording every trade. The only people doing cross-trade are people trying to arbitrage away the price difference between exchanges.
> Nobody is using bitcoin for buying coffee or sending micropayments to websites.
I was, I've spent more Bitcoins than traditional currencies on buying actual products during last year (electronics, games, hotels, flight tickets, etc.). That ended, 1 months ago when fees rose to a point limit that made such relatively small operations inviable.
That said, I still hope for new cryptocurrencies to provide a solution to scalability issues. Maybe https://failsafe.network/ or maybe something else.
"That said, I still hope for new cryptocurrencies to provide a solution to scalability issues"
But, if this is indeed a new cryptocurrencie, it will drain value out of bitcoin, and bitcoin will then be worth nothing.
The only scenario in which bitcoin isn't a bubble and has intrinsic value as a currency, is if the payment problems you mention, as well as liquidity issue, are solved by bitcoin itself.
I think you could think 'store of value' as stocks. As long as there are people willing to pay fiat for it, it is indeed a potential store of value.
Given the trends, a lot of people are willing to exchange fiat to get hands on the coins. And so, in the current situation, it does look like coins, however speculative their worth may be, are in fact potential store of value. I don't see a circular logic here, tbh?
I agree, though, unlike stock options of publicly/privately traded companies, there's no real value generated here; its... umm... 'ether' But the point I am trying to make is, at the cost of repeating my self here, as long as people are willing to pay fiat in exchange for the coins (and the trend is strong and investments continue to pour in), isn't it actually a potential store of value? For how long though, it is anyone's bet.
The "store of value" thing is such bullshit. People only started saying that after the fees made it even more impractical than it was.
Maybe it will end up as "digital gold", but until recently everyone was talking about how it would be a currency.
This comment is a little facetious, but perfectly captures the fundamental misunderstanding the general public has about crypto currencies.
It's not just drugs: any point where regulatory or market conditions create enough suboptimal conditions (ie demand), there will be a possibility for arbitrage by taking the transaction outside of that market. Weapons, people, oil, real estate, and such will constantly create this possibility over time.
The tinkerbell effect - ie money has value as long as everyone believes is has value - is combined with real economic value creation. BitCoin is a 'bubble', and is 'worthless', and is 'meaningless', but BitCoins or some BitCoin competitor will have value as long as that potential for arbitrage exists.
Legalize drugs, weapons, fake passports, money laundering, unregulated international trade, and smuggling and BitCoin will have no value. As long as those things exist, and the tech exists, the global market will demand some kind of grey currency, and keep its value relatively high.
It follows that if crypto is the most efficient way of buying drugs online, that it's probably also the most efficient way of doing other illegal stuff online. Of that we're both in agreement.
Where we'd disagree is on bitcoin or any digital bearer assets being an efficiency for transactions that don't require censorship resistance. You'd better make sure you're sending that half a million in savings to buy your new house to the right address, because it's gone forever if you mess up a single character. Also, even if you did get the right address, you'd better hope you aren't being scammed (because in both scenarios, the traditional banking system and the government at large has your back).
This is the point where you say: but multisig / smart contracts! For a start, if the 'smart' part of the contract is a human oracle, why use a blockchain in the first place (if you're both willing to rely on a third party). Additionally, point me to a single transaction where the legal ownership of a house was transmitted through a block chain transaction (with no human oracle).
Let alone crypto being a terrible idea for smaller transactions. Last I saw bitcoin at ~$20 fees, Ethereum converts to a brick as soon as someone comes up with a popular contract, etc.
If I buy and then sell $100 worth of BTC a hundred times a day, have I created $100 worth of cryptocurrency trade or $10,000? Note I've only actually used $100 here (excluding transaction fees). If it's the second, then $33 billion dollars isn't really a useful number if many of these trades are just arbitrage by a few individuals utilizing the same dollars over and over.
I'd think a more useful statistic would be the amount of USD actually moved out of bitcoin exchanges rather than trades on the exchanges themselves.
I'll certainly concede that point. You and several other people have pointed out that the daily volume might be people doing high-frequency trading back and forth, and I'm sure that's happening to some extent.
Grandparent's analogy was "I have a trillion widgets, and my friend paid $1 for 1 widget, so I'm a trillionaire!" All I'm saying is that the economic activity surrounding cryptocurrency is nothing like that.
To bring it back around: a conference devoted to bitcoin stopped accepting payments in bitcoin. People are speculating on bitcoin, but some or most of the value is based on its future liquidity and value as a medium of commerce. That seems doubtful.
And are you basing the size of personal finance sites based on Alexa data?
>Every day, $33 billion dollars worth of "traditional" currencies are traded for $33 billion dollars worth of cryptocurrencies
If I start with $20k on GDAX and day trade in and out of various currency pairs throughout the day, I could easily generate hundreds of thousands of dollars worth of market activity just by myself. There's a lot of volume but not quite as much as your comment implies.
This always gets brought up but gold is used for much more. It’s in electronics, people value it as jewelry, etc. I can go to a coin shop today and exchange my gold for a much smaller fee than Bitcoin. Gold has historically shown its ability to store value.
If the fees come back down, all of the Bitcoin people will start saying they never called it a store of value. People just have to justify why they’re making irrational decisions.
Given the massive value drop (>18% in the last month) and the crazy value growth (>1000% in the last year, figures according to https://www.finanzen.net/devisen/bitcoin-euro/chart), I'm not sure BTC is a viable way to store value... but one thing I'm certain is that BTC has lost its appeal as payment instrument due to ridiculous fees (20$ / tx, according to https://estimatefee.com/) and the waiting times.
The next 6-12 months imho will be decisive for BTC's future.
Why? What makes it more likely that bitcoin will be with something in 5, 15, 25 years than a fiat currency backed by a large and relatively stable government?
And what prevents greedy people from forming Bitcoin to remove (or increase) the maximum coin count and getting enough other geeedy miners to go along with it to be the majority fork?
> And what prevents greedy people from forming Bitcoin to remove (or increase) the maximum coin count and getting enough other geeedy miners to go along with it to be the majority fork?
The nodes define what a bitcoin is. So long as they agree that bitcoin should follow the original exponentially decreasing reward schedule, then that is what will happen.
There are some problems, for instance, if almost all miners decided to switch to another fork, then the original chain would simply die because of the difficulty. But miners have electricity bills to pay and are strongly incentivised to mine the most profitable chain. It is not a matter of convincing the miners, but of convincing the world that your uncapped fork is more valuable.
> the original chain would simply die because of the difficulty
I just want to point out that difficulty decreases when there's less mining. Difficulty would not be the problem. Bitcoin would just be more vulnerable to a 51% attack with less hash power.
This assumes that there is enough hashrate left to reach the next difficulty adjustment (every 2016 blocks).
This is even worse because it would likely be corralated with a loss of market value for Bitcoin, which lessens the incentive to mine. Combined with the ease at which miners can switch to another coin (or, at least, another bitcoin fork), and it is easy to imagine a death spiral where Bitcoin simply fails to lower its difficulty because it does not have enough hashrate to do so.
But no sensible person holds more than their wallet float (and maybe emergency fund) in actual money; there's a whole range of current accounts, savings accounts, tax-exempt vehicles, pensions, stocks, trusts, and property to hold value over the long term.
It baffles me how scared people are of inflation given how low it is at the moment in the West and has been for years. Certainly compared to the 70s when the UK had a 25% inflation rate. At least back then people realised it had a cause in the real economy and wasn't a money-printing phenomenon.
If you get a bunch of folks that have learned economics from a set of fringe books from the 70s that were never updated to account for what we have discovered in the meantime then it becomes easy to explain the Austrian school and its mindless followers. No amount of evidence will persuade them their beliefs are silly. We have some of them in power right now.
I think you could even generalize: the unquestioned beliefs brought about in childhood are hard to dislodge and seldom open to logic.
Personally I think we need to be highly wary of any group that focuses on planting its ideology in people as early as possible because of this phenomenon. Most legitimate philosophy and ideology has no problem convincing adults of its content, and no need to prey on the illogical minds of children.
> there's a whole range of current accounts, savings accounts, tax-exempt vehicles, pensions, stocks, trusts, and property to hold value over the long term.
Lolnope. For my generation in Germany certainly not. Current accounts and saving accounts deliver interest ratios hovering around 0%, some even with negative interest. Tax-exempt vehicles are only for the ultra-rich. Pensions are a laughing stock, I'm 26 now and don't expect to have anything resembling a pension when retiring with 80. Stocks/trusts? Either you really have considerable savings to start with (due to minimum order fees it's not really worth it to trade below 10k) or you got the stuff inherited at which point you're rich enough to not be affected by anything. Property? Unless you want to invest in the rural countryside that's so far off society that you'll be lucky when you have a 2x64k ISDN uplink you are not able to get property, especially not since the latest round of credit regulations which make it all but impossible for the ordinary person to get a mortgage.
Oh and that all has the prerequisite of actually having money to save. The boomer generation has royally screwed up the current young generation. We're struggling to pay rent and (in the US) hope we won't have a major injury sending us straight into bankruptcy, and that's it. Money to save is something for the elite.
> It baffles me how scared people are of inflation given how low it is at the moment in the West and has been for years.
Low inflation has only been made possible by advances in "how to feed people with cheap garbage". Rents, energy, transportation - everything has skyrocketed, but due to bad selection in the comparison basket inflation is "low". Screw that metric.
If and only if it remains deflationary, someone could completely destroy Bitcoin by maintaining a 51% attack. I doubt China is going to go from nan to an attack, but confiscate all miners in China and they could easily do so.
So, if Bitcoin could easily be worth nothing in 10 years, it's a poor Store of value.
The 51% is a better chance attack, you can still try to perform it with 10% and succeed and you can try with 60% and fail.
>Bitcoin could easily be worth nothing in 10 years, it's a poor Store of value.
Gold is more and more used in electronics, less and less in jewellery, if we move to graphene-based computers gold will not have much place there and its value in USD will probably drop. One nuke on Hawaii or California will cause huge drop in value of USD compared to other currencies.
No, a 51% attack works 100% of the time. You may or may not win a single hash, but by 100+ hashes your chain is longer invalidating their chain. Further, if it looks like your winning people will defect to you're side.
> gold
Gold is actually used for a lot of things (ex: gold leaf on books), historically it's price has gone up and down quite a bit, but within a fairly narrow band. ~0.1x to 1x while being easy to hide or smuggle.
> probably drop
Even then it's still worth more than 0.
PS: In reality you would likely cause a fork, but that would also drop the price causing miners to migrate to some other coin making further manipulation easier.
Yes, probably, but remember - you have way more hashing power still. So you just swap to their new fork and beat them out there too, and you keep doing it until they give up and are forced to accept your fork as the truth.
I'd guess one option would be to build a ban for China into the new fork directly, but that would be easy to bypass with VPNs. Ultimately, if you have the hashing power, you own it. Bitcoin can't keep invalidating winning forks forever as it's a war they lose on each step of the way.
You can do a 51% attack while owning zero Bitcoin. You will mine some in the process, but well under 1/5,000 of total coins.
Worldwide there are several hundred people that could afford to do this for the lulz, plus basically every government. Now, I don't think the odds are very high it's going to happen, but they are vastly higher than the odds USD's or Gold is going to become worthless.
> Why exactly would you want a long term value holder?
Because it's nice to have a long term value storage that cannot be randomly seized by the state, debt collectors, thieves, burglars or anyone. We have seen such things during the many times in the past where private gold ownership has been outlawed, or during the financial crisis where the balances of account holders above 100k EUR were used to pay off the debts of the bank.
> And if you did, what's wrong with gold, which has a bit of a track record?
Can be seized by the state, is subject to export controls/tariffs, and for the environmentally conscious: the production process of gold and many other metals is incredibly nasty, however gold is a special kind of bad given its chemical properties.
Gold mining is terrible for the environment, but so is mining any proof-of-work based cryptocurrency. The amount of dirty electricity used for Bitcoin alone is staggering.
Is there really precedent of debt collectors being unable to seize Bitcoins? Could they simply not just ask about your credentials to get access to your wallet?
Does anybody really hold EUR or USD though? They hold gold or stocks or similar, denominated in USD. You could say Bitcoin is the same as gold (which is also deflationary?), but has gold really been a particularly viable way to store value? Gold may never again rise to the price it was 5 years ago, despite being deflationary. Deflationary isn't enough or even required to be a store of value, it rather needs to be in demand and liquid.
Because holding a non-laughable amount of any asset can (and does) influence my opinion, both on the present and the future. To disclose potential influences is (or at least should be) standard practice.
>I dunno, I suppose one wouldn't be surprised if a gold conference didn't accept gold payments.
except no one is using gold as a currency, and all of the crypto pushers are touting it as the currency of the future, yet they an't even use it at their own conference. No one is pushing gold as a currency, so I don't understand the analogy.
These things are just not usable as currency yet, not even close. I have a hard time believing they ever will be even if they get past the technical issues.
>> it may yet turn out to be a viable way to store value
Really? I think is just kind of post-factum rationalization, something that helps Bitcoin fans deal with their trauma and disillusionment after Bitcoin has failed.
As insufferable as the bitcoin True Believers are, so too are those who claim it is trivially true it is a worthless scam currency. If scientific inference on the world were easy, we wouldn't be so awful at predicting the future, and we wouldn't rely on randomized experiments (or observational causal inference) to uncover most truths we have uncovered as a species.
The technology and use of bitcoin as a store of value is an open experimental question. The experiment is currently in progress. To believe you can infer the truth so clearly, either for or against, is the natural naïveté of the uncalibrated human mind.
Not to claim no one can ever know the future, or that some people aren't talented at prediction. All the same, there are particularly bright people who can't come to an agreement on the future state of bitcoin and was it will offer. Why is that? Is one set simply wrong, so clearly?
Go to any penny stock forum on finance.yahoo.com and the parallels are even deeper. Bitcoin, and the entire crypto-space are basically souped up penny stocks for the 21st century.
> I suppose one wouldn't be surprised if a gold conference didn't accept gold payments.
What a false equivalence. That is specifically why processors like Bitpay exist, because Bitcoin _is_ meant for these type of transactions. You can't really shove gold down the computer screen.
I don't know what you think about Bitcoin as a store of value, but if you want to liquidate quickly your "store of value", with bitcoin it can be impossible on the peak. It should have another use cases to be a store of value.
Most investments, even cash, have some liquidity problems.
Regardless, if you believe in investment diversity then transferring 0.1%‡ of your US stock holdings to bitcoin may make sense (depending upon transfer costs, liquidity requirements, and what exposure you think the US stock market has to bitcoin).
‡ Assuming US stock market capitalization is $250 trillion, and bitcoin capitalization is $250 billion.
Why do you think that bitcoins cant disappear tomorrow?
Does it have government as a guarantee of value? (currency, bonds)?
Does it have intrinsic underlying value (commodity, real estate)?
Does it have ownership rights (equity)?
If tomorrow crypto market crash, you will not be able to sell your bitcoins for 1$.
His discussion has been had a billion times. The fact that you are asking the same questions means that you weren’t convinced by the answers, so the odds of my answers actually convincing you are very slim.
Hahahahaha this is hilarious, where are all the bitcoin fanatics now hmmm? Does this confirm its singular status as a vehicle of enormous speculation or do we have to wait till people finally agree it is worth precisely zero US dollars...
Essentially because every HN post concerning cryptocurrencies has become a joke, and long threads of cryptofanatics and cryptosceptics throwing shit at each other. No one is willing to just have rational conversation on the points they agree/disagree with, but instead write attacks like: "Hahahahaha this is hilarious, where are all the bitcoin {fanatics,sceptics} now" that don't contribute to the discussion at all. You will always get downvoted by one of the sides. Personally, I would downvote you if I could for adding yet another stick to the bonfire.
To be honest, this looks like a quarrel between baboons that have invested too much, and baboons that have shorted too much. I've never ever seen HN in such a state and hope to not see it.
People are going to downvote comments, whether it's pro or con BTC, where the level of conversation feels like Reddit or just generally low-effort me-too type stuff. "hahaha" type sarcasm is why many of us come here instead. Apologies for dissing Reddit, but that's what that reminds me of first.
Like the other commenter said, it's about how rational the comments are.
Due to network congestion and manual processing,
we have closed ticket payments using
Cryptocurrencies — Hopefully, next year there
will be more unity in the community about scaling
and global adoption becomes reality.
We have, and always will, accept cryptocurrencies
for our conferences, up to fourteen days before the
event. However, due to the manual inputting of data
in our ticketing platforms when paid in cryptocurrencies,
we decided to shut down bitcoin payments for last minute
sales due to print deadlines.
That is, in its current form, Bitcoin is _terrible_ for general transactions. However, given its tremendous market capitalization, it may yet turn out to be a viable way to store value.