BTC is not money? What it's?
Disclosures · I have personally made money buying and selling Bitcoin.
Disclosures · I have personally made money buying and selling Bitcoin.
Qualities of good money are 1) Durability (not losing value with time), 2) Portability, 3) Scarcity (limited supply), 5) Divisibility, 6) Acceptability and 7) Storability.
BTC has all of them except maybe 6). And I'm no defender of BTC, I don't like it and I don't think it will ever be the main currency. It will be at best like the gold backing the day to day exchanges in another kind of "coin", and used only for clearing.
Money can be, and currently is, as "fungible" as annotations in a ledger. Banks are not that different from BTC, except they don't need "proof" because they limit who can add transactions: a VISA transaction is just "write in the ledger -X for this wallet and +X for this other wallet". No gold, bills or any fungible asset is moved around, exactly like BTC.
Portability refers to the ability/costs to transfer your money from, say, New York to Singapore. Transferring USD is cheap and easy, but transferring BTC isn't expensive either. Specially when compared to transferring cows or a gold bar.
Storability is somewhat related to durability: you should be able to store your money, forget about it, and recover it later without loss. Think of burying gold and coming back for it in five years: all your gold is still there. Wheat seeds or cows not so much. BTC is perfectly storable: the very first mined BTC would be the same BCT for years to come. I would say that paper money loses against BTC and gold in this concept, but then again, fiat money works exactly like BTC.
Losing your wallet is another concept not related to storability: you can also lose a gold coin or a $100 bill.
I disagree, the sticker price at the moment looks cheap but only because the majority of a transaction cost is socialized in block reward. To look at the actual cost of a transaction you need to sum the direct fees and the socialized fees. After all, the socialized fees are going away over time, so either users will have to pay directly or be subject to a less secure network.
An average block of 2000 transactions costs 6.25 BTC ($225,000) in indirect subsidies plus about $16,000 in direct costs. This means an average transaction costs somewhere in the neighborhood of $120.
At $120, you could probably just overnight a gold bar via FedEx.
This is dramatically higher than competitive solutions.
> Losing your wallet is another concept not related to storability: you can also lose a gold coin or a $100 bill
Yes, but losing a few billion dollars worth is exponentially harder. I would argue that over time your risk of losing all your coins in a step function approaches 100%. Even though it's step, on average it represents a negative storability/durability.
As the total quantity in circulation drops the entire supply could be seen as "rotting."