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Comment by misnome | Hacker News Reader

3 - The “value” is higher, but can you actually do more with it now than you could five years ago? Hasn’t the entire community given up on buying things such that they know pretend that was never the goal?

Without any real way to convert back and forth into real money, what reassurance is there that the price even means anything when every single holder is incentivised to lie and transact with themselves just to keep the numbers up?

How can a global system capable of five transactions a second ever be integrated into “the world’s financial fabric”? Side-chains seem to just be a great way to centralise around more unknown entities who may or may not run off with your cash.

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> ...can you actually do more with it [I assume you mean Bitcoin] now than you could five years ago?

Not really. To date, Bitcoin has been used successfully only as an alternate store of value -- one which, like gold, doesn't depend on the financial credibility of a particular government or country. Bitcoin's continued existence depends only on the integrity of its distributed consensus algorithm, which so far has withstood all attempts at hacking it. The "alternate store of value" opportunity is not small. Gold alone has a current market capitalization of $12.9 trillion.[a]

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[a] https://companiesmarketcap.com/gold/marketcap/

Bitcoin is a horrible store of value. It's incredibly volatile.

Gold is pretty volatile too. Its price has gone up and down between 5x and 10x a few times in just the past century: https://www.macrotrends.net/1333/historical-gold-prices-100-... -- no one sane would call it stable. And yet, despite its volatility, gold has been used as a store of value for millennia.

In the last 5 fives, gold's highest price was 60% higher than its lowest point. That is indeed pretty volatile.

Let's see if Bitcoin is comparably volatile…

Oh, it's highest point was only 1920% higher than its lowest point. That's definitely the exact same as gold. /s

Also, that ignores that gold has been a store of value for millennia. It's almost synonymous with wealth. In a total financial collapse, if all modern technology dies, you can be sure gold will still have value. 99.9% of people have no idea what Bitcoin is besides funny computer money.

Even if people WANTED bitcoin in a total financial collapse, what scenario collapses all normal fiat currencies and doesn't touch a system that requires cheap power and niche hardware and internet connections?

Gold has a perception of wealth but history makes clear what it actually is. For example, the hordes of gold the Spanish plundered from the Americas directly contributed to the bankruptcy of the monarchy.[1] Because they hadn't actually seized/mined "wealth" - they'd simply inflated their currency away without any commensurate expansion in productivity.

People who believe that it would be "easy" to trade gold for other goods have also clearly never tried - since the entire modern banking system came into existence on the basis of the sheer difficulty of directly trading gold for other goods. No one knows how to value gold, they don't know what it's worth other then a brick is probably a lot. If they could, then the fake jewellery scam wouldn't be as successful as it is[2].

[1] https://en.wikipedia.org/wiki/Price_revolution

[2] https://www.kiro7.com/news/local/just-say-no-walk-away-fake-...

Even better, the influx of gold from the New World was preceded by the period called the Great Bullion Famine where Europe-wide shortages of silver and gold led to long periods of deflation across the continent!

https://en.wikipedia.org/wiki/Great_Bullion_Famine

That is exactly why most people no longer use gold as a store of value and are instead using currencies that are much more less volatile. Meanwhile, Bitcoin alone has an annual volatility that is about an order of magnitude larger than gold's, and it's even worse in every other crypto token. None of these things come even close to qualifying for being a store of value.

I think you're confusing store of value with medium of exchange... most people don't really store value in currencies long term - usually they just keep enough to pay near term bills.

Stores of value are things like stocks, bonds, treasuries, real estate... and yeah commodities like gold and bitcoin. People don't care so much about volatility if they're planning to park their value there for a long time.

Sounds like you are confused about what and why something is a store of value.

https://en.m.wikipedia.org/wiki/Store_of_value#Money_as_a_st...

I’m not saying fiat currency doesn’t store value… just that, of the functions of money, it’s better as a medium of exchange + unit of account where you care way more about price stability and liquidity.

A good store of value is scarce, durable, transferable and divisible - and I think most people agree that you compromise scarcity to get price stability.

We don’t have to take anyone’s word on this though you can just look at what endowments and wealth funds hold to see what people believe are the best stores of value: https://www.nbim.no/en/the-fund/investments/#/

"Most people no longer use gold as a store of value" may be true wherever you are, but not universally. The Times of India, for example, estimates than Indian households hold gold estimated at about 40% of annual GDP, and half of all households have purchased gold in the last two years.

Increase timeline to account for scaled adoption and project volatility for those variables.

In many places Btc is one of the safest ways to store value. The scenarios it could collapse under are dark. It's biggest enemy is soveriegn currency issuers and banks. They would need to attack it such that holders lose faith in it en masse and collapse it. The successful attack they need to make is dystopian in nature. It would require a global digital identity that was attached to all internet access and an alternative (CBDC) crypto that they forced everyone to use.

Nowhere is BTC the safest way to store value, it’s got far to many risks in normal use to be particularly safe.

A double speed attack doesn’t need anything particularly dystopian to happen. It doesn’t even need to result in a large transaction just someone deciding to short BTC and briefly having the computing power to destroy it. Even just a creditable attempt that fails could completely undermine it.

A double spend attack requires a specific unsafe action by the receiving end of the transaction. As long as the receiver does not accept an unconfirmed transaction they cannot be a victim to it.

Even confirmed transactions aren't safe. The blockchain can be retroactively edited by anyone with enough hashing power: the only thing they need to do is to generate a longer alternative chain than the current public one.

There’s also plenty of fun things you can do like exclude some particular exchange from being able to commit to the blockchain. As in sorry Coinbase your transactions are no longer welcome and there’s effectively no way for them to directly fight back.

The only way around that is to constantly spend more money on hashing power than any attacker, but that cost is effectively unbound. Trying to stop some random billionaire doing it for the lulz means sky high transaction fees forever. No problem for an actual currency in widespread use, but a serious issue for a hypothetical store of value which needs constant investment just to break even.

Partially disagree: the Lightning Network [1] facilitates almost instantaneous micro and small transactions which can later settle in aggregate to the Bitcoin base layer.

I've used this to purchase goods both online and in person seamlessly. Custodial solutions (trust another party to hold your funds, like a bank) are turnkey. Right now the truly non-custodial solutions (i.e., run your own lightning node) are definitely in the realm of hacker/tinkerer, but continue to improve in terms of accessibility.

[1] https://en.wikipedia.org/wiki/Lightning_Network

Ah yes, the lightning network will save bitcoin. How many years will we hear the same song and dance before we can finally conclude this is a pipe dream?

What do you buy with the lighting network? I've always wanted to try it.

You can use it as currency on stacker.news

You can tip people on the nostr protocol. stats are on zaplife.lol

you can tip musicians on wavlake

there's a Minecraft server called satlantis where it is used as a currency

there's a lot of plugins you can use to build your own lightning enabled apps on lnbits

the space is still young so a lot of software is beta, but there's plenty to play with

check out the plebdev course on udemy if you want to dive into lightning development

You can also go to the entire nation state of El Salvador where it is a legal currency and many shops have integrated lightning payments.

Can you? I've read a few articles from journalists who went there only to find that vendors refused their payments, or asked for Visa instead.

The one from Bloomberg comes to mind: "He tells me surfers sometimes ask if he’ll take Bitcoin. He’s taken it on a few occasions, but the dips in price burned him. “Now I tell them it’s $25 if they want to pay in Bitcoin,” he tells me. “You don’t know when it’s going to go down.” " [1].

That's also to say nothing of the leader of the nation potentially losing millions of public funds day-trading crypto on his phone, the Bitcoin Bonds that no one bought, or the IMF refusing to offer funding to the impoverished nation as a result of this callous fiscal policy.

[1]: https://www.bloomberg.com/news/features/2021-06-17/world-s-b...

I pay for flights&hotels in travala.com using lightning. I also refill my phone credit or buy gift cards (e.g. for Uber and whatnot) on BitRefill.com. And I buy cheap stuff in Amazon thanks to Purse.io

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