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Comment by smileybarry | Hacker News Reader

In 1y, 1 BTC went from USD$47,113 to USD$24,735 (365 days period). If you compare from the high point, it went from USD$67,582 to USD$24,735. Doesn't sound like a good store of value, sure it's (theoretically) better than the 500% inflation of the Turkish Lira but anything is better than that.

> [...]but after it was demonstrated that even a nuclear armed country like Russia can lose its USD reserves overnight,

That's purely due to sanctions, which can affect cryptocurrency as well due to the entire ledger being public.

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> That's purely due to sanctions, which can affect cryptocurrency as well due to the entire ledger being public.

Woah boy, that's a lot to unpack. I guess you heard some news about recent sanctions to TornadoCash... and then you thought that cryptocurrency can be confiscated/frozen as what happened with Russian's USD reserves?

What has happened so far: some arrest of at least one developer, some freezing of some (centralized-)stablecoin accounts, some closure of github accounts, etc. But pure (as in, not centralized stablecoin) cryptocurrency stored in cold wallets cannot be frozen at all; and that's the whole point of cryptocurrency.

No, I was not referring to or using Tornado as example here. I was referring to US sanctions on Russia forbidding trade, therefore causing Russia to fall back on their reserves and unable to access further USD reserves.

Cryptocurrency is vulnerable to this as well because, even if you have a cold wallet and run your own node, your transactions are still public and taint every wallet that receives your coins. Vendors might not want to trade with you so that they don’t get the same treatment, exchanges might not want to risk their entire liquidity to cash your BTC out, etc.

> ...but anything is better than that.

And how many Turkish people can hold something that is not Turkish Lira as easily as bitcoin?

How would they hold bitcoin to begin with if they need to pay for local services? How would they get paid in bitcoin, or do they need to convert their funds to bitcoin ahead of time? In such a case they could’ve easily picked USD instead.

Holding foreign currency (USD)is not that easy and if there is a "corralito" event like the one that happened in Argentina, your USD is at risk too.

Indeed everyone holds non-local currency too. I'd presume USD and/or EUR have taken on the role of "store of value". I lived through collapse of a state 30yrs ago, and exactly that happens: locals refuse to hold the local currency (that reflecting on the health of the state is quickly losing value), there is a vigorous fx exchange market (either white-legal, grey-tolerated, or black-illegal but existing), and locals exchange their savings from local to foreign fiat currency. No one ever used gold, not once I saw gold being used for anything. Nor any other commodity. Foreign fiat currency that is stable is much more practical and convenient. Until BTC is as convenient as a credit card, can't see it used as "means of exchange". As store of value - maybe, but foreign currency maybe again more stable less risky (on humant time horizons), so again wins for that too over BTC. Sorry for the spoiler.

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