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Comment by arcticbull | Hacker News Reader

I don't really understand that as an argument, honestly. It's like saying "holding $1M in lotto tickets is a great hedge against the end of the world" or "$1M in macaroni." You can buy all sorts of things, why this thing? If the world ends the first thing shutting down is the thing that's using all the power. We'll need it for things like showers and eating.

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I'm not a huge Bitcoin fan, but it has proven flexible in cross border transactions. The network can run out of any country. If the USD goes to zero for some unknown reason, you get out and land in Russia, your USD could be worthless and you can only fit so much gold in your private jet. Private keys though? Those go with you, and as long as the network is still live, you aren't broke.

Lotto tickets are tied to a short time frame and country. Macaroni has a shelf life and does not transport well. Bitcoin is volatile but deflationary, so short of a network collapse it will likely retain value.

I am not seeing the deflationary part. They just split it and created twice as much Bitcoin and Bitcoin cash. There is a new Bitcoin like currency minted every 5 minutes. It is far cheaper to create digital currencies than paper money and far easier to steal. I think it is a delusion. That is not to say the technology cannot be useful. It has a lot of problems. Wait for Bitcoin 2.0

You think he is planning on having to leave the country? How would he have time. The average CEO is working 80Hrs per week. Much more than their over paid thralls. He is CEO of 2 companies. That is 160Hrs per week. Plus the 10 day silent meditation retreats. You guys do not realize the excruciating demands placed on todays CEO's. They truly are our modern hero's. He should be given his own reality show.

Yeah, (a) in totality, Bitcoin is still being mined and therefore inflating, at a rate of 3.81% per annum at the moment meaning the BTC inflation rate today is approximately double the US dollar. Obviously that's slated to change, but it's definitely not true now. It's been inflating massively all these years and yet its' value is still going up; fascinating. Almost like inflation isn't a bad thing?

(b) The effective inflation rate is massively negative because everyone keeps losing their keys. A friend asked me re: Satoshi "If he didn't believe in what he built and the future, why isn't he moving his genesis coins? What kind of man would do that?" My answer was: "the kind of man who lost his keys."

(c) The inflation rate of the crypto space in totality to your point is astronomical, since anyone can just fork a currency, give a few tokens to some promoters/shills/exchanges, get listed, and boom, that's a dump-truck of sweet sweet crypto.

(d) I'd watch the hell out of the Jack Dorsey reality TV series.

> They just split it and created twice as much Bitcoin and Bitcoin cash.

Not really - Bitcoin Cash is an entirely different "currency", that shares the history of Bitcoin up to the point where it forked.

> You think he is planning on having to leave the country?

I seriously doubt it. $10k / week for Jack Dorsey is a reasonable amount to use as a hedge against Bitcoin going exponential again. If it does, he's even richer. If it doesn't? Meh, so what. It's "only" $520k / year, and it's unlikely to lose all of its value anyhow.

So you are saying that if I owned a bitcoin before the split worth X and owned a bitcoin and bitcoin cash worth X + Y after the split that is not identical printing money.

If the US made dollarsPlus and gave you one for every dollar you currently have and said you can spend them just like dollars. That is a different currency and would not be inflationary I suppose.

Tell that to people who bought in January of last year :) some of that shelf-stable macaroni would have held its value better.

Yea, sure, you can cherry pick dates. Like if you bought the S&P 500 last September at an all time high. However, it's not about making and losing money when you're hedging against major crashes. It's about it retaining some semblance of value when something else tends to zero. I'd be very happy to own $100k of BTC if my (hypothetical) 5 billion USD suddenly evaporated, even if that $100k of BTC used to be $200k.

Except if you bought the S&P at the all-time high you'd still have 95% of your money, instead of 10% of your money. Further when the stock market crashed, BTC did too, it didn't help. My point is there are so many hedging options out there, why this one?! If gold dropped to 10% of its value one day how many goldbugs do you think would be screaming HODL and STORE OF VALUE? Or "what if there's a financial apocalypse" when their portfolio looks like they've already weathered Black Tuesday. There are tons of assets out there that haven't dropped huge amounts. Is it sunk cost? Religiosity?

I guess what I'm trying to say is nobody would declare nascent tech stocks to be a great store of value and a hedge against the apocalypse. There's tons of volatility and by most peoples' assessment (not mine though) it's the young up-start go-getter. What makes this different?

If the USD goes to zero then I absolutely guarantee you that your bitcoin will not retain a shred of purchasing value. This statement reminds me of people who buy CDS on US Treasuries assuming that in a world where the US really defaults on its debt (not some technical default without meaningful economic consequences) then your counterparts will still exist to pay up.

Consider a Venezuela scenario. Inflating currency and limits on currency conversion and transfer to prevent money escaping the border. With crypto your money is already across the border.

I've never understood the Venezuala argument about Bitcoin. When someone is buying Bitcoin with a volatile currency (like the Bolivar), it means someone else now has that volatile currency. The volatile currency doesn't suddenly dissappear and take it's problems with it. How is this different from buying dollars or euros with the volatile currency. Am I missing something?

countries in this situation often limit or outlaw buying foreign currency

Buying bolivar means you think it's super low and is a good buy.

Yeah, I've spent a long time considering the Venezuela scenario. You can't mine there because all the good mining setups get nationalized ([1], [2]) so let's leave that method of acquisition off the table.

That means the only way to get some is by exchanging. You can either:

(1) Exchange with someone else in the country someone who already has bitcoins (let's say they mined them). In Venezuela, there remains the exact same number of both Bolivars and Bitcoin, so it's zero-sum. Neither Venezuela nor Venezuelans are better off by this exchange because nothing's changed.

(2) Exchange with someone outside the country. Problem 1: Who on Earth will take your worthless Bolivars? Problem 2: If you do manage to find someone who will take your worthless Bolivars, why wouldn't you take US dollars instead (since you can trade freely, you may as well just open a USD bank account somewhere). Or some other asset that hasn't lost 80% of its value in the last year? Gold? Equities? Gold equities? The list is truly endless. If you find someone to take your worthless Bolivar bags for real assets there are much, much better assets.

The fiat-value behind Bitcoin doesn't just spark into existence, willed by the devout masses. It's not like Venezuelans can suddenly mine Bitcoin in a way nobody else can because of their bad government. They also definitely don't all have Bitcoin in a way they can just ignore the balance of their bank accounts.

How do you solve the initial distribution problem in a way that makes sense?

[1] https://www.newsbtc.com/2018/05/31/officials-in-venezuela-be...

[2] https://bitcoinist.com/venezuela-now-requires-bitcoin-miners...

Right. One solution is to do buy crypto many years in advance, during good economic times. Whenever disaster strikes, it's best to have bought the insurance policy when the threat seems unlikely and far away rather than imminent.

Admittedly, I don't know what could be done with crypto to help the average Venezuelan at this point.

The solution "predict which upcoming cryptocurrency is going to be the currency of the future, then wait for the apocalypse and be wealthy" doesn't seem like the most reliable way forward - or even a solution to any given problem other than "I'd like to be wealthy, but I'm not."

Right, isn’t this like less than 0.001% of his net worth?

Totally, Jack can do as he pleases with his well-earned billions. I was responding to the attitude of the parent.

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