Hacker News Reader

Comment by res0nat0r | Hacker News Reader

Unfortunately for me right now bitcoin has zero value.

Until I can use the millions in coins to pay off my house, buy a car easily, pay my taxes and go out to eat with them, or hassle free convert them to cash in my bank, it is still funny money.

View on HN

You could say the same for gold, stocks, or bonds. But at least Bitcoin has the ability to be cheaply, easily, and quickly transferred to anyone else in the world, meaning it has the potential to be useful for paying for your house, car, taxes, food, and be easily converted anywhere, once enough people are using it.

I can relatively easily convert large amounts of gold, stocks or bonds to cash currently unlike bitcoin. Also I don't care about potential use in the near future (20 years? 2 months?).

Unless you provide me a way to realize bitcoin to actual USD in non trivial amounts with the same amount of effort it would take to convert my stocks or bonds, it is as useful a currency for real life as is my current GTA V Online bank account.

"Unless you provide me a way to realize bitcoin to actual USD in non trivial amounts with the same amount of effort it would take to convert my stocks or bonds, it is as useful a currency for real life as is my current GTA V Online bank account."

So it's either as easy as stocks or it's useless?

Hmmmmm.

I think you're overstating your case a wee bit there.

Yes. If I can't get a million bucks out of my wallet so I can actually use it in the real world, then it is pretty useless to me.

I think you might be missing the point. Bitcoin right now operates more like gold. You can't pay off your house, buy a car, pay your taxes or go out to eat with gold. However, there is a healthy market for exchanging gold for currency. You wouldn't call gold funny money. I think it would be more appropriate to compare bitcoin to gold right now. I have no idea how healthy the market is for exchanging bitcoin for other currency, though.

Gold is a physical good with actual useful value. It is hugely overvalued right now, and anyone telling you to "buy gold" usually holds gold and benefits a lot from that.

Those cable "invest in gold" deals are exactly this but worse - they sell you gold more expensive then the commercial market that can never be redeemed for that price.

But it has a real cost of production that represents its relative industrial worth.

Bitcoin is valueless though. Created Bitcoins do not have any industrial value - you can't use them for anything else, even though they have a cost to create. There's no reason, if they lose value, for anyone to buy them from you - whereas with gold if you sit on it long enough, it will become valuable when someone needs gold for some type of industry at minimum.

Fiat currency is valueless and can only be used because people trust the government issuing it. If Bitcoin can gain the trust of enough people, it can easily become more 'valuable' then many currencies in existence at the moment.

Fiat currency is backed by the legal obligations of the country that issues it that it is a suitable means to extinguish debts.

Bitcoin is not. No one is obliged to accept Bitcoin as a currency for settling debts anywhere in the world, it has to be converted to something else. Similarly to gold - you don't have to accept gold as payment for debt, but you do have to accept USD.

This is where the problem lies: BTC acts like a commodity, not a fiat currency - and people are treating it like one buying into it. The problem is it has no value as a commodity other then being Bitcoin.

It does have value. It's long lasting, pseudonymous, secure, and it costs less to make transfers between two parties. These are qualities that are hard to find in a physical commodity. What gives value to an individual bitcoin is the Bitcoin network. There is real value there.

https://bitcointalk.org/index.php?topic=183571.0

You can at least buy a Ford.

I doubt you can pay your house with gold bars alone.

I doubt you can pay your car with stocks alone.

I doubt you can pay taxes with option derivatives alone.

I doubt a lot of people call those funny money.

You're missing the point that all kinds of symbolic wealth can be easily converted into other kinds of symbolic wealth. If this weren't true, it wouldn't be symbolic wealth.

Coinbase will let you sell up to 50 BTC per day, so if you don't mind waiting 2 or 3 days you can certainly buy a car with bitcoin.

But which is the cause, and which the effect?

Reply on news.ycombinator.com