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Comment by jhh | Hacker News Reader

I think about Bitcoin (and similar systems) primarily as a long term store of value.

I think they are a pretty fundamental innovation in that space.

What are good alternatives? Gold, cash, or ETFs have substantial drawbacks - especially in situations where property rights are insecure and inflation runs wild (or just eats up savings at a somewhat moderate pace, as is the case in many developing countries).

Of course Bitcoin is also a human system, eventually, but what you are trusting is an emergent, non-hierarchical order which should be more resilient than hierarchical systems. The technology facilitates the emergence of such a system.

I actually think the flawlessness of the technology is not a necessary condition of Bitcoin's success. If bugs are found then consensus in the social system can emerge which can minimise damages

All of that being said I think the use case for blockchain is probably quite narrow.

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> All of that being said I think the use case for blockchain is probably quite narrow.

Name one, I dare you.

Name something that really matters. That will offset all the damage they do.

Funding niche software projects by using tokens. For example, Unitrade launched a token to fund development of a project providing advanced tools for Uniswap, a decentralized exchange https://unitrade.app/ https://uniswap.org/

Decentralized autonomous organizations (DAOs) that are new and experimental forms of company formation. See DXdao https://dxdao.eth.link/#/

Compound, a large player in the Decentralized Finance (DeFi) space that allows anyone to borrow against their crypto holdings https://compound.finance/

The craziest part of Hacker News is the near universal opposition to cryptocurrency and blockchain technology. It is not going away, and governments are finally bending to reality and accepting it, rather than banning Bitcoin and similar outright.

There is no better way that a developer can earn outsized riches than blockchain and cryptocurrency. You are solving tough problems in difficult, constrained environments and are rewarded extremely well for doing so by a global group of investors involved in this alternative financial system.

But please, if you don't like crypto, just build whatever SaaS bullshit an MBA is telling you to and take your 0.1% equity for busting your ass. I have spent years in the extraordinarily interesting world of blockchain and have been rewarded extremely well in terms of personal growth, education, and financial rewards.

> There is no better way that a developer can earn outsized riches than blockchain and cryptocurrency. You are solving tough problems in difficult, constrained environments and are rewarded extremely well for doing so by a global group of investors involved in this alternative financial system.

You are not rewarded for "solving tough problems" or anything else related to creating actual value. It's FOMO driven gambling, scams and enabling organized crime that gets money into the crypto ecosystem.

> But please, if you don't like crypto, just build whatever SaaS bullshit an MBA is telling you to and take your 0.1% equity for busting your ass. I have spent years in the extraordinarily interesting world of blockchain and have been rewarded extremely well in terms of personal growth, education, and financial rewards.

The use case I mention in the first sentence of my comment: Long term store of value.

If that's the case, then it does a terrible job at it. Cryptocurrencies, by and large, are absolutely horrible for a reliable store of value. The swings in value are too great and numerous to count, based on the whims of whatever people feel like they are, often on a daily basis.

I'll take US Treasury notes any day for "long term store of value". If the United States gets to the point where they can't honor Treasury notes, we will have much bigger problems on our hands anyway.

See the "long-term" part. On most timescales since its inception, btc has stored value pretty well.

I totally read that part. It still sucks for it because of how unpredictable cryptocurrencies are. Bitcoin has a bunch of "Bart Simpson" style pump and dumps and, even over the course of the many years of Bitcoin, unless you were a true believer from the early days, I'd find it hard to believe you came out ahead or didn't lose your shirt in the process. I'd rather not be subjected to that, and there is absolutely no guarantee bitcoin will be relevant 10 or 20 years down the road. Another black swan event, a cryptocurrency that becomes the new hotness, or maybe even a quantum computer breaking into wallets could render bitcoin worthless.

Another thing to consider, most users of bitcoin or whatever else generally relies on exchanges to get out what they are really after, US Dollars. The end game is to see which sucker will buy your tokens for more than you paid for it, then you can cash out. But to that end, we kinda have to trust the exchanges as well, and there are many cases of fraud that have happened at that level, which shakes trust in such a system.

Now if we are being intellectually honest here and asking ourselves if bitcoin and its ilk is good for something like speculation or even as the basis for treating it as an "exchange" for transferring money (albeit a rather low performing one at that compared to other established systems like SWIFT), then I can potentially see the benefit in that, even if I personally have no real use case for it.

It seems like a really bad candidate for a long term store of value. For one, just look at the price volatility - that is the last thing you want in a value store.

Second, the fact that it’s ONLY use is as a long term store of value is red flag for being a GOOD long term store of value. If there is an adverse economic situation (which is one of the primary times you are going to want to tap into that long term source of value), the price is going to collapse... because everyone will be needing to pull OUT of the store, and no one will be wanting to buy.

> What are good alternatives? Gold, cash, or ETFs have substantial drawbacks

The search for a good, long-term store of value has been around since the invention of money. Adam Smith's "Wealth of Nations" discusses this problem since the beginning of capitalism.

And, BTW, Bitcoin is no better. It's only worth what people are willing to pay for it. Just ask anyone who bought when it was worth around $20k! The only way they'll get their money out is if another sucker comes along.

A good store of value's value does not fluctuate.

The point of investments like ETFs, mutual funds, stock, ect, is that you're allowing someone to put your "stored value" to use, so they can create more value for you.

But, here's the thing: If society crashes, it doesn't matter what you've put your money in, we're all screwed.

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