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Comment by Consultant32452 | Hacker News Reader

I know this is just a matter of opinion, but I feel it would be hard to over-estimate the value in getting humanity off centrally planned currencies that are manipulated to cyclically transition massive amounts of wealth from the poor to the wealthy.

Of course there's no guarantee that bitcoin or any of the other cryptos will resolve this issue for us, but they are our best chance at the moment.

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> I feel it would be hard to over-estimate the value in getting humanity off centrally planned currencies

That's not what this is about, Bitcoin has utterly failed at that mission, and nothing about cryptocurrencies necessitates computationally wasteful proof of work. The only reason Bitcoin is still popular is because of people using it for speculating, it's not a viable currency.

Bitcoin continues to grow at an enormous rate. It hasn't failed at anything. Soon BTC will surpass the value of gold. We are actually on our way to getting off fiat.

> It hasn't failed at anything.

It has failed at being a usable currency, and not merely for socioeconomic reasons. A currency is more than just intrinsic value.

We need an uninflatable store of value more than anything, which Bitcoin is.

Think of how much unnecessary transacting and consumption is going on right now to escape a constantly inflating dollar. "Investments" and consumptions will tank with a deflationary store of value.

>We need an uninflatable store of value more than anything

People keep repeating this as if it's a well known truth, and I'm wondering where they came up with the idea. Why are we to believe that inflation is the source of our current economic woes?

Do you feel like you're getting the appropriate share of money printing needed to maintain your purchasing power? Don't the really desirable assets, like the best land and houses, and the best education, get increasingly more expensive, relative to your purchasing power?

Certainly someone is gobbling up those dollars. I don't think it's most people though.

That isn't really how it works. Banks do not "print money," they expand the money supply through loans. When interest rates are low, savers move their existing money away from assets like bonds toward higher yielding assets like stock and real estate.

If the money supply were to suddenly shrink, the average person would not become richer; that added value would be concentrated in fewer hands. That's basically what is happening with bitcoin.

Sure, just as Visa, Mastercard, Circle, Paypal and several of the largest major banks just accepted its use and facilitation. And while companies such as Tesla, PornHub, etc accept it as payment. Its totally not going anywhere and will never make that transition.

But that high value (and the volatile prices) is entirely the problem (coupled with other issues like the extremely low potential number of transactions per second). As it stands, Bitcoin will never be anything other than an investment vehicle. Maybe another cryptocurrency will be a suitable replacement for fiat, but right now and for the foreseeable future, crypto is still too niche, too complex and volatile. At most we're seeing banks extend their offerings with cryptocurrency, but none of it points to widespread replacement of fiat outright. There are too many institutional, technical and social barriers.

Bitcoin plays a role in the crypto ecosystem. It's like gold. Ethereum is like the finance industry and things like DOGE are like currency. The value will be pegged to BTC, making it the foundation for the ecosystem.

>and things like DOGE are like currency. The value will be pegged to BTC, making it the foundation for the ecosystem. I disagree. It is more realistic for existing currency based stable coins to become the currencies. For example countries like the US will create a cryptocurrency pegged to the dollar, China with the Yuan, and Europe with the Euro. Currently USD pegged stable coins are the most popular.

This. I've realized years ago that the current fiat system can be unsustainable because it's very hard for regulators to avoid the temptation of applying QE and other monstrosities. But I realized way too late that BTC is the vehicle to flee from that (in a simple way compared to moving physical assets across borders).

It already succeeded in helping rich people in China to bring their wealth out of control. This has maximum utility for a lot of people. I'm not sure what will come after the current financial system (and it most probably won't go anywhere and will co-exist for some years before crypto will be banned everywhere), but this new type of wealth transfer mechanism already gets used a lot. Everyone who distrusts the current financial system or is oppressed by their regime is interested in it.

I don't know how the world will look like (it'll probably be very hard to continue the current path because capital has found a new way to move across borders and avoid taxes, again) and I don't know if it's generally good for global society, but Pandora's box is open.

I agree with the energy discussion and that it's wasteful, but the utility of it (transacting without governmental permission) seems to be higher for the participants. And they don't care about its socioeconomic impact, they care about its utility for them (money for miners and speculators who keep BTC's value high and the network functional, permissionless transaction for the actual target audience / users of BTC). BTC was built for permissionless money transactions, the speculation is just a byproduct and everyone is focusing on it instead of looking at its actual value for its users.

edit for the sibling comments: You need BTC only to move your assets from one country/wallet to another. You can then move it to a stable coin like USDC and slowly and safely get it out of the crypto system without having to deal with the volatility. This takes you half an hour and you're done. It's currently an investment vehicle, but its utility comes from being able to get money from A to B regardless of government intervention. Even if BTC drops to $3k, it still has this value. Looking at the price of BTC is missing the point: it's more than $0 and you can do a transaction in 10 minutes and that is all that matters to move assets.

> Soon BTC will surpass the value of gold

How would one measure that? The price of one bitcoin compared to the price of a kilogram of gold? That seems arbitrary. Total market value? Transaction volume?

Total market value.

The computationally wasteful bit is a temporary problem for which solutions are already being created. The Lightning Network is one such effort.

Governments are already taking efforts to fight against crypto. The fact that bitcoin is classified as an "asset" is the government adding friction to using it. Every time you transact in bitcoin you have to put that on your taxes because there's some capital gains/loss. Of course, they don't talk about it as if that is an attack, but it is. And they wouldn't be attacking it if they weren't scared. It's surely not guaranteed, maybe not even likely, but it's still possible that we will win.

The computationally wasteful bit is the proof-of-work, which is an inherent part of bitcoin. The Lightning Network is just about scaling transactions.

Your government rant is a non-sequitor - bitcoin doesn't become any more efficient just because The Man doesn't like it.

The computationally wasteful bit will go away with things like the visa network where they will only have to persist back to the blockchain when you transact with a wallet that isn't on their network. Otherwise it'll just be records in a database not unlike regular currency.

Bitcoin is deflationary, isn’t it? How could it ever replace fiat if just by merely holding it you are guaranteed in the long run to increase value? You need mild inflation to get people to actually spend and not hoard. Bitcoin’s supply is fix so there is no point in ever spending it unless you want to cash out.

Yeah because Ill never buy food and housing until I die because my currency is deflationary. That logic is so tired. Also the fact that you can convert US dollars to investments instantly instead of consuming basically extends the same situation, yet we still spend when we need to.

You see a lot of people buying groceries with BTC currently? What I see most people do is buy BTC and hold it, living off their regular paychecks, waiting for the BTC portfolio to hit some goal. They then trade it to the next investor who does the same. It’s not a currency so much as a store of value. It’s a stock, not money.

Obviously thats going to be the case through rampant price discovery. Youre not saying anything original. Are you smarter than Visa and Mastercard and Paypal? Maybe they know something about future consumers that you dont.

You clearly have some kind of chip on your shoulder either about me or about this subject. Acting like a snob won’t get you many conversation partners. Take care.

I didnt think my response was very aggressive, at least it wasnt meant to be. Nevertheless you're free to do as you wish. Toodles

If we imagine a deflationary currency encourages savings over consumerism... That doesn't sound so bad.

From everything I’ve read, it tends to stagnate society. Why buy a car when you can just hold onto your money and tomorrow you can buy a house? Why buy a house when tomorrow you can buy a mansion. No value is produced because there is little incentive to invest into anything since just holding onto your money is a safe investment.

People buy things for the utility they provide. I could have not bought a PC 20+ years ago and waited for today’s PCs which 100x faster and cheaper but I wouldn’t of had a PC for 20+ years. Deflation in PC did not stop me from purchasing something I needed. Did society stagnate because PCs got cheaper?

Sounds like what the people owning 95% of wealth are currently doing.

This is only a problem in a deflationary spiral, which is just as problematic as an inflationary spiral. Gold is deflationary and the industrial revolution was kicked off while most of the world was still on the gold standard.

> Also the fact that you can convert US dollars to investments instantly instead of consuming basically extends the same situation, yet we still spend when we need to.

I've actually wondered about this -> why not use the SP500 as a form of currency? It seems like this would fit somewhere in between the US dollar and Bitcoin - store of value, increases in price over time (or at least historically does), pays dividends (so a productive asset). Downsides are no capped supply, and volatility (but so is Bitcoin).

This would be a massive wealth transfer to the companies on SP500 because demand for the stocks would go up and those companies would basically get infinite zero interest loans by issuing more stock, which would inflate your currency.

The first government to move their money onto a crypto us going to have massive control over their economy. Roll their own crypto, keep the keys that allow more money to be printed, have the ability to lock people out of their wallets on a whim? They could even extract taxation by running all the nodes and taking the transaction fees.

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