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Comment by foreach32 | Hacker News Reader

Got paid in Bitcoin for a year. Living in Europe, got a client in the US. Client had Bitcoin so it was faster, cheaper and easier to get paid directly in Bitcoin.

Obviously, no landlord accepts Bitcoin yet so I had to sell a portion for EUR.

Another obvious use case: If you change the denominator from USD to the FED balance sheet, the S&P just went sideways since 2008. So did everything else.

Bitcoin for me is an inflation hedge and I have all my wealth in the digital space at the moment. Bitcoin, Ethereum and Polkadot. I am simply waiting for StartUps to build more use cases around the space so I can safely stay there until I die.

So: Payment and escaping the destruction of FIAT money by the central banks.

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> Bitcoin for me is an inflation hedge and I have all my wealth in the digital space at the moment. Bitcoin, Ethereum and Polkadot.

Going all in on crypto (or any other asset class) is the opposite of a hedge.

Haha, how so? Bitcoin is the only asset which outperformed everything else in the last 3 years. So yes, it is the ONLY (next to Housing and Gold, maybe - based on the numbers: Bitcoin also outperformed Gold) are the only hedges against inflation. Even if you went all-in FAANG, you barely kept your purchasing power.

Concentrated trades is how you get wealthy, spreading your bets is keeping your wealth.

But this is a once in a liftime chance. I can‘t believe people on a tech forum are so blind to the fact that we are in control for the first time. Hedge funds dump money into a system which they can‘t read or understand. It was the opposite for hundreds of years. The average Joe had to trust the financial world. Now YOU can read the code the money runs upon, all in the open.

So yes, show me how you did perform with your FIAT money in an age of money printing.

Your words were true up until 2008, everything after that: Throw away your old school investment books, they don‘t work anymore.

“Hedging against investment risk means strategically using financial instruments or market strategies to offset the risk of any adverse price movements. Put another way, investors hedge one investment by making a trade in another” - https://www.investopedia.com/trading/hedging-beginners-guide...

What inflation/devaluation are you hedging against, if all your money is in crypto?

Haven't I said? Inflation. Have you checked house prices or asset prices lately in terms of the balance sheet of the FED?

Bitcoin is the only asset which gave you a real return in the last, maybe 10 years. Even if indexed the NASDAQ or whatever, your real return was probably below 0.

You can copy paste a lot of definitions, that's great. Just tell me how your returns were and how you measure them. If you measure them in Dollars, then show me what your money buys you now versus what it bought you 10 years ago.

You can say I am hedging against the devaluation of FIAT currencies.

The point is that that isn't what "hedging" means. If all your wealth is in one thing then you take on all of the risk with that thing. Property, fiat money, diamonds, cryptocurrency, whatever. How big a risk you perceive that to be is irrelevant.

The "debates" on HN about crypto always devolve into the pro and anti factions talking past each other which is very dull. A little linguistic confusion makes a nice change.

You mean you are betting everything you own that FIAT currencies will be devalued relative to your crypto currencies.

It's a bet which proofed itself right for the last 3 years. And I bet it will go on for a little longer, yes!

I understand your reasoning with regards to inflation. But what makes you so sure Bitcoin will keep going up?

Yes it has gone up over the last 10 years. But 10 years is a relatively short time, and moreover this was a period during which all assets went up. I don't think one can really extrapolate from that alone that Bitcoin will just keep going up forever. And how do you explain away the various risks? Governments could theoretically hurt the price if they decided to pass more regulation that made interacting with an exchange harder. Or if they tried to close the exchanges altogether. And we are talking here about worldwide governments. I am not very worried the US would do something like that since they have mostly shown support towards cryptotech. But China or Russia or India or the EU might. And the other big worry is the lack of transparency. The exchanges are hardly as trustworthy as the NASDAQ or the NYSE. One cannot tell what sort of plays they are making to manipulate the price. And then there's the risk of speculation itself. The price is not determined by anything more fundamental than user sentiment. There is no constant stable demand or anything. User sentiment can be manipulated (by government regulations for example) or a big scare might happen organically. There is also the risk from competing cryptoassets. And risks from infighting between Bitcoin developers and miners as is happening right now with Ethereum.

Now of course all investments have risks so this alone is not a reason to not put money in Bitcoin. But I just have not yet seen a rigorous examination of all the risks.

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