Given that bitcoin isn't a medium of transaction anymore and a store of value this makes a lot of sense.
Too bad they aren't replacing this with another cryptocurrency at the moment.
Too bad they aren't replacing this with another cryptocurrency at the moment.
Can someone bother explaining what this actually means? 3 weeks ago everyone is hype about how Bitcoin is going to be the future of currency and now that it's tanking and vendors are dropping it like a hot potato, its no longer a transactional currency and it's now a "store of value".
There are "old-school" cryptos with lower transaction fees (Litecoin, Bitcoin Cash). There is not much reason to use them as an actual currency except for the fact that they have more inertia than most other projects (and therefore more things have been built around them). In particular, most places that had some sort of Bitcoin integration can very easily switch to Bitcoin Cash for much lower tx fees.
There are many cryptos that are trying to be currency in a permanently scalable way (IOTA, Ripple, Stellar)
Other cryptos are trying to be cash, i.e. anonymous (Dash, Monero, ZCash).
Most others are either A. intended to be more platform than currency (Ethereum, NEO, EOS, Tron) or B. too small to mention.
> Low-income South Koreans are finding it harder and harder to rise to the middle or high-income classes through their own efforts and abilities, a recent study shows. Just two out of every ten households saw their economic status rise through increased income and assets over a three-year period, the findings indicate.
Crypto provides an alternative economy where class mobility isn't broken in the same ways. Youth will continue to flock to it until the local economies sort themselves out.
Lots of people have believed that in the past. Sometimes they've been right, sometimes not. The future supply of commodities doesn't always follow expectations.
Why is this a good thing? Nobody uses gold as a store of value anymore because it just wasn't viable going forward. Why would Bitcoin be any different?
The pro-bitcoin people endlessly repeat analogies with gold, except gold price has not been growing since its peak in 2012 and it's only used to store value by governments due mostly due to conservativeness (know a politician willing to kill his career by switching the country's gold reserves to any other security?). Aside from that, I don't see anyone else using gold instead of interest-generating assets (stocks, bonds, real estate).
Due to that, I think Bitcoin has failed and I no longer see it surviving long-term, simply due to the fact that there is much better tech out there now in the form of "alt" coins. (Not going to shill any specific coin here.)
What do I mean by "failed"? I got the impression from what I've read from Satoshi that they wanted Bitcoin to be a type of electronic cash and not necessarily only a store of value (see e.g. [0]). Yes, decentralized and trust-less, but still useable for even micro-transactions (from the linked article):
> It could get started in a narrow niche like reward points, donation tokens, currency for a game or micropayments for adult sites. Initially it can be used in proof-of-work applications for services that could almost be free but not quite.
Bitcoin seems very much inspired by Bit gold [1], which summarizes with:
> In summary, all money mankind has ever used has been insecure in one way or another. This insecurity has been manifested in a wide variety of ways, from counterfeiting to theft, but the most pernicious of which has probably been inflation. Bit gold may provide us with a money of unprecedented security from these dangers.
A currency (read: gold) only has value because we, as a society, decide that it does. Gold is a "good" store of value because we have currency depreciation with fiat, so storing your long-term value it in doesn't make sense. What happens when (not if) we stop storing our value in physical things like gold and we create a global digital currency that's fast, secure, trust-less, decentralized, and most of all a stable store of value? (Open to hear discussion on if that is even possible.)
A cryptocurrency with those characteristics has all the benefits of gold, without the need for carrying all that expensive-to-move, heavy metal around with you to be able to exchange any of it for goods. And you could exchange on a global scale, something not possible with gold. Banks would be on their way out, because the people would be in control of their own money.
What happens to government-backed fiat when people can exchange their gold like they would fiat? I'd think fiat would start to lose favor. But I'm not sure what affect that would have on world governments and society. (Again, open to discussion because I'm not super well-versed in these subjects.)
Currently, Bitcoin can't do that in its current form—that is, be easily exchangeable for goods—its simply turned into a digitized gold that has the same issues when it comes to exchange—but I think we'll eventually get there with a coin, and there's some promising altcoins that have awesome tech right now. Maybe that coin ends up being Bitcoin after all. Maybe there will be coins, plural, who knows.
Maybe all that is a bit too utopian and it simply can't work on a global scale with governments. Still interesting to think about.
[0]: http://satoshi.nakamotoinstitute.org/emails/cryptography/17/
They're much faster, and considerably cheaper than Bitcoin to use.