It looks like you have the causal relationship there backwards. A bitcoin currently has value, so there's a lot of effort miners put in to get the block rewards + fees. But the amount of effort a miner puts in doesn't make the price go up, the price can move independently to hashrate.
Deflationary currency is undesirable as a means of exchange because you don't want to use it, and that is also one of the reasons why central banks target low inflation rates.
Incidentally this is why austerity in debt-laden countries is kind of a terrible idea. You're taking a broken economy and removing what little slack remains in the system. And if the economy was broken due to corruption or incompetent government, you're kind of just betting on regime change at this point, which (apart from the human toll) won't be great economically either.
That's not true. The typical credit card processing fee ranges from about 1.3% to 3.5%. Average international remittance fees are about 7%. For comparison the average Bitcoin fee is about $1 right now, so 1% on a $100 transaction. So Bitcoin compares favorably to its competitors.
2) why did you pick $100 as your basis? If I try to buy a $5 sandwich in Bitcoin and have to pay 20% transaction fee that is not a good platform for transactions.
I like some parts of crypto, but transaction fees on most coins right now are not one of those parts.
As far as I understand ACH doesn't work globally
> 2) why did you pick $100 as your basis? If I try to buy a $5 sandwich in Bitcoin and have to pay 20% transaction fee that is not a good platform for transactions.
Or use lightning and pay a fraction of a cent transaction fee
No thank you. I’ll stick with my credit card. If I want to pay for something semi anonymously I’ll use cash.
You should stick with your credit card, that was literally always allowed.
People aren't doing this now though.
They are buying bitcoin and holding (hodl) or they are trading that bitcoin for other crypto.
I think most people aren't using it as a currency, more so speculation
Its digital gold thats it, its no more a store of value than antique's, rare cars, fine arts etc etc and unsurprisingly those markets can also see the bottom drop out of them for decades. Ultimately its people en masse who decide what something is worth, but big players can manipulate those markets with resources, laws, taxation, media sentiment and its easy to spook people when they value something, so dont get attached to anything if you dont want to be manipulated.
The other thing to note is, it only takes a few hundred million £ on the Asian market to get the GBP to drop against the USD in time for European markets. So there are very few entities who can cause the crypto market to fall like this. Think about that.
An antique desk that loses all value in the open market can still be used as a desk or at least firewood.
A rare car can still be used to transport yourself, as a prop in a movie, or scrap for other projects.
A "worthless" painting can still inspire, liven up a room, or gifted as a gag.
Crypto that loses its value has no other underlying utility over and above the output of /dev/random. That's a MASSIVE difference and more clearly demarcates BTC as a money laundering/Ponzi scheme rather than "digital gold" or a viable currency.
Its a decentralised currency, its not backed up by a country and their nuclear arsenal rammed down people's throats as we will possibly be seeing with Ukraine.
Notes/currency only has value where the threat of violence extends to prevent any counterfeiting attempts, so just like you see matches or cigarettes used as currency in a prison, it still has value. Its value went up when the Greeks had their financial crisis because the Greek banks stopped money leaving the country and this is the important thing, crypto is the thing that helps people move money out of a country fast across borders in a crisis. If you tried to move gold in or out of Switzerland you'll get stopped at the border, they are hot on that sort of stuff but it also shows their level of intelligence in world affairs. Crypto if done properly has a level of privacy affordable to anyone, not just the super rich but also a level of transparency to maintain its integrity from counterfeiting by criminals or the central bank.
Then there's the lack of an FDIC equivalent for crypto, which is HUGE for the "not just the super rich" demographics. The 19th and 20th centuries had many examples of runs on the bank where life savings were wiped out. Crypto exchanges have already screwed thousands, and maintaining your own wallet and transfers is not ever going mainstream even if crypto had any intrinsic worth beyond speculation—which it doesn't.
If you have the assets to gamble, that's for you to decide. I myself would rather rely on assets with underlying value that extends beyond speculation.
My house is worth way more than I think it should be. Helps my credit score. But if it and all the homes in the area suddenly and magically dropped to $0, I'd still live there, because it's a home. The reason I purchased it wasn't for speculation or my credit score; it was to live in. You can't live or eat or build in BTC. When the bottom drops out, you will only get to keep the bits and the memories of a more naive era.
isn't the prohibitive electric bill to reconcile the distributed ledger the ultimate showstopping friction?
If US or EU inflation hit 2000% there would be global consequences. There is no reserve asset currently large enough to redenominate US denominated assets, aid payments would collapse, and currencies pegged to the dollar would collapse. Betting on BTC for such a world is reasonable, as there would be a reasonable chance your gold reserves would be become inaccessible, seized, or both. However ammunition might be a more effective financial hedge in this situation.
If they're allowed to. Which underscores that the true innovation of Bitcoin is to circumvent rules and regulations.
How are they going to buy groceries with their BTC? Pay rent? Taxes?
Go to the local black market and exchange it for local currency? You can do that just fine with USD, too.
Does doing black-market deals in BTC somehow make you immune to arrest, prosecution, and execution?
Because fiat volatility in inflation/rate hikes respectively (ie the NPV of a USD) completely dominates the other factors.
The volatile leg here is the fiat dollar, and everything denominated in it is whipsawing around as its value changes.