Hacker News Reader

Comment by rrecuero | Hacker News Reader

One of the main use cases of Bitcoin is becoming a store of value. For that use case, transaction fees matter a lot less. If you want to store/move millions of dollars and protect them against inflation, those fees don't matter. Gold, also a store of value, has high transaction fees as well.

View on HN

It's difficult to see mass adoption of Bitcoin from a purely store-of-value use case because most people don't (directly) own gold and probably don't think about hedging against inflation.

I'd argue instead that the main use case is to buy a cup of coffee with Bitcoin anywhere in the world without having to deal with fees and red tape.

So using your analogy of evolution, transaction scaling is probably going to be the biggest driver of who gets to be at the top of the crypto food chain.

Owning gold is not an effective hedge against inflation. If it was then we would see that gold returns would consistently be correlated with inflation rates, but in reality that hasn't happened. And there's no reason to expect that Bitcoin would be an effective inflation hedge either.

If you want to actually hedge against inflation then TIPS or stock indexes are usually better choices for most investors.

I agree with your points. Transaction scaling is going to play a big role. I wouldn't neglect the store of value use case so quickly. Even if it only does that, it's a trillion dollar market. https://www.fool.com/investing/2017/08/17/how-does-bitcoins-...

Bitcoin Cash was forked to handle the cup-of-coffee use case. It looks like a diverse ecosystem is forming, where the consumer can choose to transact with the best currency for that transaction, rather than the "best currency."

I can't imagine using bitcoin as a store-of-value, it's so massively volatile.

Also, I don't fancy trusting my money to a small group of Chinese miners, who seem in practice to control the network.

You can do actually things with gold. More than you'd expect (for instance http://geology.com/minerals/gold/uses-of-gold.shtml )

BTC is quite different as it is only a "value store" and is inflationary (the supply of BTC is fixed and won't increase)

I think you mean non-inflationary?

yes my bad: https://bitcoin.stackexchange.com/questions/19961/is-bitcoin...

Well, except the supply of bitcoin goes is massively inflationary (miner's fees), and it is unclear the network can function without miner's fees.

My personal suspision is at some point the miners will convince everyone to make a fork which keeps miner's fees forever.

Reply on news.ycombinator.com