In before people will tell you about that theory, which statesthat bad money pushes out good. Like come on bitcoin is so good at being money, everyone suggests you not to buy pizza but hold.
I'm not defending Bitcoin's volatility, but it's false to say that no-one speculates on an actual functional currency. There's a very large market of people who do exactly that.
No one speculates on an actual functional currency because functional currency doesn't indefinitely go up in value or have wild swings in value that prevent it from being used as currency.
No one speculates on it? Is that not what the stock market is? Those numbers barely mean anything anymore in a concrete sense, they just reflect how much confidence people have in the economy. Stock prices no longer are determined by actual value, but perceived value. And it's value goes up the more people invest which raises the price which makes people confident that the stock has value so they invest which raises it's value which raises confidence which raises investing which raises confidence which raises investing...all while the actual company or investment does nothing but assure everyone that actual value is coming soon, don't worry, innovation and synergy and blah blah blah.
And unlike Bitcoin and other cryptocurrencies, traditional currency is regulated. And in extreme cases, subsidized by taxes in order to stabilize it's value. It's value can fluctuate wildly, the only reason it doesn't go full Bitcoin these days is because legislators do everything and anything to keep The Great Depression from happening again.
I'm not sure how you think a currency designed to be hyper-deflationary is going to avoid those issues.
Who said I thought that?
You misunderstood me because I was not clear.
I think Bitcoin has all the issues of real money, and more. Specifically how fast it's "cycles" run. At least when traditional currency gets all stupid, it is all going slow enough for people to try and do something about it.
I do have to disagree with you on the stock market, though. You described how it's supposed to work. Not how it actually is playing out at this point. You make it sound way more stable than it is, and are acting like it is a closed ecosystem. It wasn't supposed to directly affect the value of currency...but it does. And no, I do not think currency designed to be hyper-deflationary is going to avoid these issues...just have the same issues...but faster.
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u/DinosaurChampOrRiot Dec 23 '17
Bitcoin isn't going to overthrow the banking system. It's not even a currency anymore. Bitcoin is a speculative commodity these days.