Exactly. Bitcoin needs only to survive to gain long-term credibility in the public's mind. I've been long since 2011. Here's what I wrote back then:
"If Bitcoin passes the harsh tests of crisis again and again, it will slowly gain credibility in the public’s mind, both as medium of exchange and store of value. Over a period of many years or even decades, as the world gradually learns via trial-and-error how to use Bitcoin, becomes familiar with its properties, and ultimately comes to trust it, nothing can prevent it from gaining as much credibility as, say, gold.
The world’s existing legal and regulatory regimes may not welcome Bitcoin at first – few governments are likely to take kindly to the emergence of a decentralized, anonymous, global currency beyond their control. Sooner or later, however, governments will adapt to the changing circumstances, as they always do. I would expect governmental acceptance of Bitcoin to occur initially in less developed countries, as many of them are already used to having their fortunes tied to a global currency beyond their control: the US dollar.
If I am right, in the long run, as man-made crises of all kinds erupt all over the planet from time to time, global adoption of Bitcoin should gradually expand from niche markets to the broader population. Ultimately, global adoption for Bitcoin should be enormous."[0]
[0] https://cs702.wordpress.com/2011/05/29/on-the-potential-adop...
> BTC will be popular and grow because it's popular and winning right now
This sound circular-ish to me. How about a different interpretation?
- BTC is overhyped to the point of completely non-technical people in distant countries buying BTC "to get rich quick" (this narrative is pushed hard by both media and BTC fans).
- so there is a constant influx of USD into the BTC ecosystem from those folks. Note that it happens regardless of any technical or economical analysis and drives BTC price up
- however, that influx is clearly limited (by the number of naive people) and predicated on constant growth [1]. The only real purpose of BTC for those "investors" is to get rich quick, they will never buy coffee with it. As soon as USD:BTC flattens out (and it inevitably will), they will try to cash out, crashing the markets in the process. It didn't happen yet just because there were so many people to be convinced (or fooled), but it's going to happen.
[1] side note: in this sense it's literally similar to ISIS, which amuses me a bit
The same thing happened when people claimed to be 99.999% sure Trump would never be president, but of course they never actually bet any money on it.
One could argue the grandparent doesn't argue their point either, but they definitely seem to put their money where their mouth is. All these people who are so against crypto and like to sit at the sidelines moaning about a bubble, why don't you either short it or bet against it? A la http://blog.samaltman.com/bubble-talk
It's very hard to predict this market in the long and the short term. As far as I can tell speculation is the only driving factor in bitcoin. Not something I want to bet on or against it's too random for me.
There is an inherent asymmetry between going long and short. If you're going long, your losses are capped at what you put in, and your gains are unlimited. The opposite is true if you are going short: your losses are unlimited, but your gains are limited.
It is definitely more work though and maybe not something most people are willing to do unless they have strong reasons to believe they are right and can profit from it.
(Another way is also to do proxy bets/investments, i.e. go long on things that are inversely correlated with X, but this is less practical in the case of cryptocurrencies for various reasons.)
Also for every bitcoin millionaire there's countless people like me who didn't buy and sell at the right time. You see it go up 10%, you have no idea what's going to happen tomorrow, so you say "oh, this is a fine roi." Trusting the market has ruined many more fortunes than it's made and greed is rarely a bearer of good luck.
And finally, trading is like coming up with passwords. You may think you're clever but in reality, your innovative strategy was likely programmed as an algorithm 30 years ago and your perceived edge is likely imaginary. TA bots, arbitrage systems, pump-and-dump commenting botnets, and sentiment analysis of big-data for leading indicators have been used by traders heavily since, well, the beginning - remember where bitcoin came from; everyone who had a coin in 2009, before you ever heard of btc, was likely also savvy enough to leverage all of these.
Also, Do Not Keep Too Much In Exchanges. If history has taught us anything, it's private wallets on private computers that are turned off most of the time is the safest place to store them. If I was a criminal with a 0-day exploit, the very first thing my code would do on a victim's computer is look for wallet.dat.
So have fun, trust nobody, don't panic, and it's probably best not to invest too deep.
I've used Bitcoin to buy medication from India. When ppl say shit like this, I get confused. Literally sit there & use it whilst ppl say it can't work. Really odd.
It works. I've used it. It works. I'm not sure exactly what it takes to get through. A functioning system doesn't seem to suffice.
A global payment system which is faster than a wire transfer. An uncorrelated hedge for assets. P2P payment. Things like that?
For comparison, the "fundamental" value of USD is a trust in the US Government to maintain its value. Comparing that to the fundamental value of Bitcoin would be a fun discussion to have, but the fact remains that the US has done it for 225 years and Bitcoin has done it for less than 9 years.
Actually, by that reasoning, I guess the fundamental value of Bitcoin is the distributed self-interest and capability of Bitcoin holders to maintain Bitcoin's value, which is obviously a powerful force.
Can you make money speculating in Bitcoin? Obviously. But it is not fundamentally backed by something that people have long-term trust in -- it is only worth what you can trade it for at that moment.
People always underestimate the power of network effects. People have been predicting the demise of facebook for the last decade. Surely something better will come along at eat its lunch, right? Wrong. Network effects are and always will be king.
The USD was backed by gold until Nixon, you can only count the last 40 something years against Bitcoin's 9.
Mind blown, right? :)
The value of a Bitcoin itself is only indirectly linked to this -- it is very possible that another cryptocurrency will prove more useful (cf. ETH), and people will switch to using that other currency for their cryptocurrency needs.
Yes, Bitcoin is great and enables new things. Bitcoin "investment" / speculation is another thing entirely.
I've been asking for positive examples for years, and I still see no signs that Bitcoin is poised for more than niche adoption. Sure, if you want to do something modestly illegal, like buying gray market prescription drugs, Bitcoin may fill a niche. But it hasn't caught on for legal transactions, and its traceability makes it bad for seriously illegal activities. And even if you're only doing something modestly illegal, you have to be pretty technical and pretty dedicated to make it work. For most people it's way easier to give cash to their friendly local drug dealer.
So yes, it doesn't have strong fundamentals. The underlying commodity, long integers, is freely available. Despite years of "Bitcoin will be widespread soon" puffery, the use value is very weak compared with alternatives. At least you could plant tulip bulbs.
P2P payment is a big one. I think kids may use it, since they can't get PayPal et al(?). Thought of that yesterday. That's a generation growing up with crypto.
Investing in startups around the world is new (via token sales).
Investing in uncorrelated assets is valuable. Eat gold.
Browser micropayments could get big (Brave browser). Ppl may even get paid for attention in the future.
Iota for the internet of thing (haven't looked into that much).
Hedge against fiat inflation.
Internet ported to decentralised infra if Trump etc start pulling 1984 bs.
Self-driving cars paying toll road via crypto (just made that up).
Solar panels off-setting their cost via crypto-mining. Then ppl have crypto to spend.
Decentralised file systems.
Decentralised storage.
That's a few whilst I whale on my legs.
& A few other anti-inflammatory medications. & Other bits & bobs.
I've given a list of other use cases.
I've bought modafinil before. That's legal, also. I try & be open about things. Helps against cunts who try & attack me.
Edit: bought the Moda with a CC, I think. Not from a pharmacy.
And that's my big problem with Bitcoin advocates. I ask, "How is Bitcoin creating value today?" And 98% of the answers I get are, "Tomorrow will be amazing!!1!" I have received that consistently for eight years.
Strong fundamentals don't include "might be amazing one day". I too enjoy science fiction, but...
Edit: you seem to not know they are real, because you haven't looked into it. Because you don't think it's real. Maybe someone else told you when you asked, but you didn't listen?
Edit2: Howard Marks -- the investor -- recently said bitcoin wasn't real. So you're not alone in thinking x-real-thing isn't real!
I'm probably going to be holding some of the assets for a decade. Something like that. Unless the whole thing tanks.
Good investment opportunities don't come around vary often. By the next one I should have made the money back (& more).
The entire crypto-economy is worth something like 70B. Way smaller than Facebook/Goog/aapl. If you want a sure thing, crypto ain't it! I do think it's a good bet, though (asymmetric).
I've used Bitcoin again instead of a wire. Wires don't go on the weekend.
To review, gray-area suggested Bitcoin could be a speculative bubble because there's strong exuberance and weak fundamentals. You objected to that phrase, claiming that "it works". I said that "works" is too low a standard for strong fundamentals; for that you need significant use driven by a user value proposition stronger than the alternatives.
You claimed, as best I can tell, that significant use is occurring. I am asking you for data demonstrating that. I have been asking Bitcoin advocates for that for years and never received any. You haven't given me any either. Do you have it?
1 is yes. 2, I believe it will be. We haven't seen 2 much yet b/c time hasn't occured.
A) wires are better, as far as I can tell. For speed.
B) traditional VCs are investing in token sales, today.
C) crypto hedge funds are open today.
I never claimed there was significant use. I would argue it's a functioning system & there are strong value props (better than alts).
You know there isn't significant use. You want to wait? Wait. I'm fast follower. I like to benefit from new technology. Startups/hackers. That sort of thing. I think other ppl can benefit if they have a look. 99/100 hype is bs. Sometimes though.
It's good to be sceptical. I was.
How do you not realize how biased you are? That comparison is ridiculous.
The fact that you have to concede the point you're making so immediately is evidence you are being irrational.
>Because it serve multiple functions: hedge against inflation, safety, commerce,
Money laundering, tax evasion, drug sales...
You can hardly call it safe either. Most of the exchanges have been full of shady and fraudulent activity. I have no doubt the exchanges are probably filing orders and doing other sketchy things to drive the price up.
In the former case, consumers pay car manufacturers to spend energy to produce cars, in the latter case bitcoin buyers pay miners to spend energy to secure the blockchain. In both cases, if the end-user of the (virtual) good ceases their activity — consumers buying cars/people buying bitcoins — the good in question will automatically stop being produced (miners don’t burn off energy to produce bitcoins if they can’t sell them for a profit).
In this way, Bitcoin works just as any other consumer good: the (bitcoin) buyers finance the activities of the producers (Bitcoin miners) in order to produce a useful tool (electronic cash).