The baloon will pop out soon. It's clearly a balloon - people using it to get money out of China. At some point, what goes in, will go out. Money Flow.
The volume of bitcoins bought with bolivars (Venezuela's currency) is inherently limited: you would only want to sell bitcoins in exchange for bolivars if you could spend the bolivars immediately. That basically limits the sellers to people already having bitcoin and living in Bolivia.
What is this supposed to mean? It sounds a bit like carving IOUs in stone but that is probably not what you were hinting at.
Mind you, there are a few downsides too - potential to create transactional race conditions if you control enough of the system; difficulty changing into other currencies; architectural decisions yet to be ironed out about how to scale to a mass audience.
Lack of ability to reverse a transaction could also be seen as a negative in certain lights -- no "visa, cancel this charge, they scammed me".
I would consider Rai Stones as a good analagy, given they also stored suffering in a trustworthy way: https://en.wikipedia.org/wiki/Rai_stones.
When I say "suffering" I'm referring to the amount of causality associated with a given amount of value stored, not the human emotion attached to it.
With Bitcoin however, assuming I believe that unregulated digital currencies are valuable, I'm still left with the question 'why is this one particularly valuable?'
The answers typically given include market adoption, support from companies, current value, and name recognition. These things have value, but none of them are intrinsic to bitcoin, and are all subject to rapid change.
For that reason, I don't consider bitcoin to be in any way 'stable,' especially since most of its value is driven by speculative investment rather than actual utility.
The gold bubble should pop
This usually comes after an exchange experiences a loss of service. I would be curious to see what drama unfolds this time, since the exchanges are more numerous and seemingly more robust at this point in time.
You can't say things like this without supporting them and expect to be taken seriously. Blockchains look to me like a brilliant approach to a real problem, but the approach is still not good enough to actually solve that problem. Also, most Bitcoin enthusiasts seem to misidentify the problem that it approaches.
There are major issues, volatility not being the least. And I'll be the first to admit I doubt many of its proponents more ambitious claims.
However, on a basic level, its capability to reliably store and transfer value has only grown and become stronger in the past 8 years.
If it's a bubble, it's certainly an incredibly long running, transparent bubble. There isn't hidden, crucial information, compared to assets like Madoff's fund and housing that were recent long-running "bubbles" (of a certain sort). In those cases, the hidden information becoming public would have ended those bubbles sooner.
> However, on a basic level, its capability to reliably store and transfer value has only grown and become stronger in the past 8 years.
It's been pretty terrible at storing value over the past 8 years, because of the volatility (though it's been pretty good as a speculative asset). Its capacity to transfer value has grown, but that's just because the ecosystem surrounding bitcoin has grown -- e.g. something like M-Pesa grew much more over the same time frame, just because more people accept it. This has nothing to do with the technology.
I agree it is difficult to determine how well Bitcoin has "stored value" over the past 8 years. But I don't think speculation should be casually dismissed, as continued speculation rarely happens for many years without reasonable fundamentals supporting the space. Short term bubbles can possibly be more noise/mob-mentality than meaningful signal. However, many bubbles over time, coupled with a strong underlying trend, is definitely a powerful signal that something interesting is happening. Additionally, the volatility is decreasing year over year, which is another point in favor of bitcoin as a value storage mechanism.
I think one big problem in discussing bitcoin is people get hung up on different things that are supposedly the "purpose" of bitcoin, and then argue in circles about that. There are definitely some questionable ideologies in the bitcoin space.
As no single group is in charge of bitcoin, I'd personally would rather not assume any specific predetermined purpose, and just look at how the system is functioning and what the fundamental characteristics and dynamics seem to be.