Is Bitcoin actually a medium of exchange? It seems to be functioning more as an investment to be hoarded rather than spent.
That statements not a given. If it were so, people would not use credit cards.
In the scenario where you believe bitcoin will be worth $100,000 and you have $7,000 or 2BTC, you decide to buy a computer for $3,500. If the remainder of your value is in dollars, you will have $3,500 in value. If the remainder of your value is in bitcoin, you will have $100,000.
The depreciating asset you've invested in here is the macbook, not bitcoins.
I have a 1.4 bitcoin T-shirt. I don't regret it one bit.
Is that you?
http://i.dailymail.co.uk/i/pix/2013/01/04/article-2257209-16...
Gold is hoarded and traded much like bitcoin, from what I've seen.
Au is indeed useful, but not so much as nearly indicated by its current pricing. There's a _long_ history of human predilection for gold-as-a-magical-substance versus gold-as-an-industrially-useful-element.
Not exclusively, but for the large part.
If you look at historical English prices, prior to the 19th century, the penny was 1/240 a pound, and the farthing ("four-thing" -- one fourth a penny) was 1/960 a pound. Call it 1/1000th.
A labourer's wage might be 20 pound/yr. It's more useful to think of the farthing as roughly equivalent, at least in work-time, to a dollar, and 20 pound as $20,000.
A pound, then, was a lot of money. And even it was (in English currency) silver. Gold were guineas: 1 pound 10 shilling.
It could even be expanded to include inflationary currency in a country where hyperinflation is occurring. People will hold on to USD or some other currency as an investment because it'll be worth significantly more tomorrow than whatever currency the supermarket down the street accepts.
I do think there are some aspects of bitcoin that limit its use as a medium of exchange (transaction times, current lack of stability), but I don't think its the deflationary part.
This doesn't really feel the same. You might use USD to store value because you know that it's value isn't going to fluctuate like crazy from month to month or year to year. So if you can afford to feed yourself today, you can still feed yourself tomorrow. You're still spending your money.
No one I know with Bitcoin spends it, with the exception of a novelty purchase of beer. And why would you, in 4 years the value of bitcoin increased over 10 fold. You'd be stupid to ever spend it while this trend continues.
Noted, and I tend to agree with you on that point.
> You'd be stupid to ever spend it while this trend continues.
For sake of argument, assuming you know this trend will continue you'd be stupid to not put all of your money into it. At which point, you'll ultimately need to spend it to get things you need (whether you're spending it on purchasing other currencies, or spending on the actual goods). Unfortunately, we don't know the trend will continue or if it'll reverse or if it'll level off.
My bet is that it hasn't caught on as a medium of exchange simply because that's not really a major pain point. Cryptocurrency's competition as payment isn't $USD; it's Visa, Mastercard, Discover, Stripe, Square, and other payment processors. People bitch about these companies, but they usually bitch about them from a concentration-of-power-and-fees standpoint (which Bitcoin doesn't actually solve, once you consider the costs of the commercial Bitcoin exchanges), not a convenience one. When it comes to convenience, whipping out a wallet-sized piece of plastic or your cell phone is a lot better than waiting 12 minutes for a transaction to settle on the blockchain.
It died off because _some people_ tried to turn it into a real thing for micro transactions, etc.
Certainly made it hard for me to take it seriously as a semi-layman at the time.
> So that made you less likely to trust the code/governance?
Well... yeah! What's your point? That projects deserve trust based on their branding? I'm not convinced until there's peer approval, especially not if it's piggybacking on something "trendy".
I do agree though it's a shame it got subverted from the ultra low value p2p tipping platform it was becoming. Feels like it's just litecoin left as credible alternative in that area.