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Comment by goialoq | Hacker News Reader

Why does volume matter? BTC is failing as a currency because it's in a speculating bubble. So, volume is just BTC circulating among traders and storage systems, not being used for anything.

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    > BTC is failing as a currency because
    > it's in a speculating bubble

This feels pretty inevitable. There's no reliable tie to any economic activity, virtually no raw materials are priced in Bitcoin, and there's no central institution that can price stabilize, so pricing anything in Bitcoin (rather than: x USD/EUR/GBP/whatever as Bitcoin) seems a long way off.

It's also -- comparative to fiat or commodities -- massively untested, so price shocks seem inevitable. Regulatory or technical risks that could reduce (or massively inflate) the value seem almost certain.

Apparently Bitcoin is trying to re-position itself as Digital Gold instead of currency now.

https://multicoin.capital/2017/09/21/bitcoin-better-digital-... https://medium.com/@tuurdemeester/bitcoin-digital-gold-or-di...

What does it mean that "Bitcoin is trying to re-position itself" ? There is no central "Bitcoin" organization, and the only person who might have been able to speak with authority about the goals of the project hasn't been heard from in years.

Bitcoin was always digital gold. That was it’s value proposition from the beginning: a return to the gold standard, in digital form.

I think btc is being more and more recognized as a store of value rather than a currency. Gold/stocks also fail as currencies and are also prone to speculation bubbles.

Funny, that's exactly opposite of my perception.

It seems too volatile to use as a unit of account or store of value, but almost perfect as a medium of exchange.

Are we looking at the same charts? https://coinmarketcap.com/currencies/bitcoin/

Mediums of exchange need to encourage usage, not hoarding.

Here's an interesting thought: you need a certain amount of liquidity to overcome the liquidity premium (https://www.investopedia.com/terms/l/liquiditypremium.asp). However, if the velocity of your asset is too high (nobody has incentive to HODL), then your asset becomes a medium of exchange because nobody wants to hold it due to price risk relative to fiat.

So the best digital currency is one that is valuable to be _held_ but still has high transaction counts.

The article that stimulated my thoughts on the matter: https://docs.google.com/document/d/1-ix9BDmGie8tPAwrfRKqe9CN...

Do you mean something other than velocity? It doesn’t make sense I’m hat context. (I’m not opening a google doc for security reasons).

The article is great and gives context. Maybe use a service like Pocket or a proxy to open the link?

Velocity is how quickly money changes hands. Did you mean volatility?

> not being used for anything

That is a common misconception on HN, almost repeated on every Bitcoin thread. There is, in fact, evidence usage for payments is sharply increasing:

https://blog.bitpay.com/bitpay-growth-2017/

Transactions != Payments

The increases in transactions are due to HFTs speculating: https://www.bloomberg.com/news/articles/2017-01-16/high-spee...

Also, 70% of bitcoins won't be moved for 6+ months, making it more speculative than currency: https://www.coindesk.com/analysis-around-70-bitcoins-dormant...

Did you read the webpage? BitPay is a payment processor. They mention the increase in total BTC transactions but it focuses on their growth as a payment processor

They're converting Bitcoins to USD and back again, which is HFT activity. People are not using it to make payments to people but converting it to/from other currencies, which is speculative and not currency behavior.

Bitpay is a payment processor, they receive bitcoin on behalf of a store, and then give the store USD or EURO or whatever. When Bitpay says their activity has gone up, that means more bitcoin is being used to pay for real goods, services, etc.

Please go back and read the article, or just look at their homepage...

Neither of those two articles mention bitpay. Did you reply to the right comment?

You didn't even read the page. They showed an increase in payments.

HN seems to be very negative towards crypto currency in general lately. Disappointing really.

If I was going to pay you 100k, would you rather receive it in btc or yuan? You are a chinese citizen in this scenario.

If you have the means to manage offshore funds, you'd want it in BTC so you can stash it somewhere outside China. If you're an ordinary Chinese dude, you'd want it in Yuan since that's the only thing you can spend.

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