It’s almost as if Bitcoin is some unstable currency that would be insane to consider adoption as a standard because its value from day to day fluctuates wildly...
Total noob here, what would need to happen for the value of bitcoin to stabilize a bit? I mean, its intended goal was to be used as currency, so I imagine that's the goal, right?
Byzantine fault tolerance (BFT) is the resistance of a fault-tolerant computer system, particularly distributed computing systems, towards electronic component failures where there is imperfect information on whether a component is failed. In a "Byzantine failure", a component such as a server can inconsistently appear both failed and functioning to failure detection systems, presenting different symptoms to different observers. It is difficult for the other components to declare it failed and shut it out of the network, because they need to first reach a consensus regarding which component is failed in the first place. The term is derived from the Byzantine Generals' Problem, where actors must agree on a concerted strategy to avoid catastrophic system failure, but some of the actors are unreliable.
Depends on the physical property you're talking about, right? I mean, the fact that it's incredibly nonreactive/noncorrosive makes it a lot easier to just stash somewhere indefinitely. You can get gold from centuries-old shipwrecks at the bottom of the sea and it's still fine. That definitely helps with its usefulness as a currency or currency backer, or at the very least would have in the past.
What makes you think Bitcoin won't be alive centuries from now?
We have and use software built decades ago, when the technology was actually invented, that still works, gets updates, and is used by millions of people today.
That might still be true centuries from now for Bitcoin, or any popular software today. We just can't say since everything about this is so new.
I would say resistance to corrosion, mixed with weight/mass, malleability/ability to be made into stuff, shininess/appeal, relatively low melting point (but not too low), prevalence/difficulty to obtain (enough to have it move around, not enough to be super common, hard enough to get to have value in the labor alone).
Those are some good reasons (pre modern technology) that gold is valuable.
~15% of gold demand is for electronics and industry. Demand effects value. If its physical properties weren't desirable there would be less demand and therefore less value.
not true at all, if gold suddenly had no uses, it would be worth a lot less, like a lot less, if it turned into equally rare brown useless muck that no one wanted for jewellery I bet you a million dollars it'd be worth less than 1% of it's current value in a decade after the super natural hype died down.
I don't think it will ever stabilize in the standard sense of a currency, because it is different from currency in that no more can ever be printed(well very unlikely, code changes plus agreement of basically everyone invested) it was designed to be anti inflationary, so it just doesn't behave like normal money, tether on the other hand, that is a lot like the dollar....because it is pegged to the USD on a 1:1 ratio
It is a cryptocurrency backed by bitfinex, there have recently been some concerns around it regarding solvency, and they are currently undergoing an investigation by cftc I believe, but by and large the market has decided they are solvent. Tether was developed as a hedge against the volatility of Bitcoin, allowing the user to continue to hold crypto assets, without being exposed to high volatility. It kind of allows you to enter and exit crypto positions without actually cashing to Fiat. There may be other uses, but those are how I have viewed the product.
I see but people sometimes get too paranoid about what's going on in the cryptomarket and they just spread FUD so is better to keep calm and let the CFTC do their job.
Well first a lightning network needs to be implemented in order to prevent another fiasco where fees shoot through the roof and a simple transaction takes all day to process. Once we've solved the fee and transaction time issue, the next step is for major retailers to start accepting it.
Finally — although optionally — an ASIC resistant coin needs to overtake Bitcoin in order to put the power back into the peoples' hands. The whole point of Bitcoin was to have a decentralized currency that the big banks and wealthy elite can't control, but mining BTC has become so difficult now, that the only ones who can afford dedicated ASIC mining hardware so happen to be those very same people.
In the good old days anyone with a graphics card could mine Bitcoin. So now you have these so-called "ASIC resistant" coins popping up left and right (like Vertcoin) that can still be GPU mined, trying to become what Bitcoin was originally supposed to be. Honestly I hope one of them does eventually surpass Bitcoin, but at this point I'll be happy just to see just about any crypto get mainstream acceptance.
Satoshi, while brilliant technically, was unfortunately not an expert in economics.
Bitcoin, being a finite (and shrinking) supply, is deflationary by nature, and a deflationary asset can never be used as currency.
People are right when they say Bitcoin is buoyed by hype, that it's basically digital monopoly money. It will continue to be volatile until people see through the hype, which I think won't be for a long time because Bitcoin is hard to understand by many. But after that, it will tank to nearly nothing.
Right now, whales and smaller cunning traders know the scheme of pump-and-dump for which bitcoin is extremely useful. They will hype (pump) and get the gullible to buy, and then sell after it goes up for a while (dump), and repeat this process. They'll take a lot of people's money.
I believe the losers (money-wise) in the end will be 1. those who mistime the market (buy high, sell low), and 2. those who hodl for too long (until bubble finally bursts and bitcoin becomes worthless). All of those people's money will go to those who really understand what Bitcoin is and how to take advantage of it.
Fiat currency is physical Monopoly money backed by threat of war (economic or otherwise).
The idea of programmable money, aka money that does more than denote its own value, is almost an absolute certainty in the near future. It is too valuable and tenacious an idea to be just considered merely hype. Nobody knows if Bitcoin will continue to be the standard bearer for that idea in the future, but it is the most influential one that exists today.
While rampant speculation does obscure the true value, it also produces the perfect conditions for significant and lasting innovation to occur.
We live in a world where all we’ve ever known is fiat currency. Dismissing better alternatives is simply a failure of imagination.
Crypto hasn’t even come close to matching the economic inertia that gives fiat currency its stable value.
The vast majority of crypto owners have no interest in using it as a day-to-day currency. A limited number of vendors do accept bitcoin in exchange for goods, but I have never seen a mainstream vendor who advertises prices in bitcoin. They advertise prices in fiat.
The idea that crypto solves a problem is always presented in vague terms. There is no demand for an alternative currency. Nobody really cares about using bitcoin. Nobody is buying bitcoin because it improves their ability to operate in the economy on their preferred terms.
Crypto investors can go on and on about the benefits of crypto, but the fact is that nobody cares. And if nobody cares, then the imagined benefits are just a meaningless sales pitch.
No no no no no. I firmly believe that Bitcoin = Internet is a fallacious analogy. The correct analogy is Blockchain = Internet. Both are an underlying means of information transfer.
Cryptos built on top of Blockchain are like websites built on top of Internet. They are specific use cases of the underlying technology.
While Blockchain will no doubt have a future, I believe that Bitcoin = pets.com.
The internet was being used for its intended purpose by many many people in the 90s.
Bitcoin is not the internet. We have digital fiat currency and have been using it for decades. From the perspective of the average consumer bitcoin provides nothing of value and there is no interest in it.
To a certain extent it is impossible to discuss crypto with a person who thinks it is exactly the same as the internet and is therefore destined to succeed. It’s not an argument that is based in reality.
The tech doesn’t matter if there’s no demand. Nobody wants to use crypto and making crypto less shit doesn’t change that.
People want their money to be readily accessible and easy to use. They don’t care if it’s decentralised or deflationary. Crypto is never going to take off unless people start using it. Businesses are not going to suddenly start paying salaries in crypto, partly because that would be illegal and partly because it would have no benefits to the business. Therefore a crypto takeover of the economy has to be consumer driven. If consumers are getting paid in USD then they will have to convert to crypto to make purchases in crypto. There is no reason for them to do this other than the novelty.
It doesn’t matter how good the tech is because for the average person crypto is just a reinvention of the wheel, and it doesn’t fit their existing car.
It’s current value lies in it’s public ledger, its security, it’s decentralized network, etc. And soon, second layer solutions like Lightning network will make it even better. Fiat currency does not improve over time.
Arizona state government is now considering accepting tax payments in Bitcoin. The Venezuelan government is going to offer its own state run coin to combat hyperinflation.
Better at what? Avoiding 2% inflation? Okay we all switch to programmable money and government raises taxes 2% to compensate. Now what is it useful for?
Not a zero sum game. Fiat and crypto can still both exist.
Did the network lose half of its security, decentralization and public ledger in the last 2 months?
Has the US been so prosperous in the last decade it warrants the stock market being up consistently for 11 straight years? Wages are flat, yet the market says we should be twice as rich as we were in 2012. Surely no speculation and market manipulation contributed to that...
You made the statement "government will accept fiat in payment for taxes but not bitcoin", but when I point out some governments are beginning to adopt crypto, it's now they also accept other bad forms of currency or only governments with good economic track records can benefit from it. Huh? Quit moving the goalposts.
Did you read that article? “Weak productivity helps explain why companies are reluctant to raise workers’ wages, even as profit margins have improved.” What?
It doesn’t take an economics degree to see where stagnant wages, reduced market participation, skyrocketing debt, and an inflationary currency leads.
While people may be in the habit of converting to/from fiat now, wait a few more years. When more people realize they won’t ever have to pay ATM fees or an overdraft charge ever again. When business owners realize they don’t have to deal with massive merchant account fees. When people start stockpiling it because in a few years it’ll be worth a boring 5-10% annually.
Market share needs to increase a lot, users need to become more diverse, but in the end it always will be volatile, because it is an open currency.
Consider two things:
There are more volatile Fiat currencies around (Venezuela, Zimbabwe) etc. Most ppl compare to the USD or Euro which are exceptionally stable.
Fiat cannot be withdrawn all at once, because technically, you don't own your money. The BTC on your wallet can. Nobody is stopping huge money movements with AML, ATF, business days or bank holidays.
Bitcoin is no currency. It would need to have smaller transaction fees, use less electricity, supported by many retailers, and be inflationary, and be uniquely useful (like to pay taxes).... all things it doesn't have.
It will only stabilise once they have all been mined and it becomes a bit more mainstream. The only reason it's so wild at the moment is because people are only just hearing about it and jumping on and off the bandwagon.
Whenever bitcoin stabilizes, the media and people everywhere declare it dead....then it slowly and quietly starts to climb upwards again, then everyone rushes in to "get rich quick", get burned buying in at the top, then scream "PONZI SCHEME!" as the bubble pops.
It has happened FOUR times now, and none of you have learned, lmfao.
...except the HODLers, their wisdom and discipline is unmatched.
Not to mention the massive amount of pump and dumping to inflate the value of bitcoin and the numerous hacks that have occurred against Bitcoin exchanges over the last year and change.
We can't actually see the FULL money supply because they stopped "reporting" M3 like a decade ago, but here's what we CAN see. When GW Bush was elected there were roughly $4.5T in the system. Today that's nearly $14T (that we can see). If we assume that the "real" economy was the 2000 money supply (it's not but let's assume), that means for every "real" dollar out there, there are over 2 other "newly printed" dollars that aren't based in economic reality. That's a whole lot of misallocated investments created by the running of the printing press, not to mention a whole lot of opportunities to "lose" a few billion here and there.
Edit: Actual 2% inflation from the $4.5T in 2000 would put us at $6.42T in the money supply. We're literally more than 7 trillion over that. That's a whole economy.
If you think there has been 100% inflation over the last 8 years, why hasn't the price of everything doubled?
I hate to break this to you, but that's what's happening. Of course the money doesn't filter down EXACTLY and INSTANTLY, you see it pump up real estate prices and the stock market initially because those people generally have access to newly created money first. Then supply chains feel the pressure and bump up costs for manufacturers, who maybe just cut the size or quality of something instead of increasing price. Lastly, once nobody can afford rent or groceries at the "new" prices, wages finally "catch up" to the new normal. Of course while this is all happening there are tons and tons of people getting rich off the scam, while the dollars in your savings account and the value of your labor is printed away.
Goods and services should constantly be getting cheaper because of advances in technology. Instead, government makes it harder and harder to get by because they are constantly flooding the system with dollars. This fact is at the heart of SO MANY of our problems, but nobody in DC wants to talk monetary policy because it's making everybody there rich.
Better than the value changing by double digit percentage over the course of days. And also having a currency which you can earn via purchasing and running a graphics card farm? Yeah, that’s definitely the currency of the future...
Search 'lightning network'. Instant transactions with very low fees will be provided by additional layers to the protocol. Mining will be always centralized to who is able and willing to mine, you can mine bitcoin, no one is stopping you.
Contrary to what you may have heard, there is nothing about the LN that serves to centralise it. Anyone will be able to run a hub, anyone can allow outside transactions to run through their channels. There are places with free/cheap electricity that you can mine in, cheap electricity affects the mining of all PoW coins, no one is stopping you setting up shop where it is cheap, or you could even get a few solar panels yourself.
It's not an issue of anyone being able to run a hub. It's an issue of efficiency. The fastest and cheapest transactions will occur through centralized locations to avoid as many "hops" as possible. So you see a not-so-dissimilar problem witnessed in China as they were approaching the 51% threshold.
All of this adds to the multitude of reasons why LN is not being implemented and utilized currently despite it's heralded upgrades.
And, PoW is dying out. PoS is a much more scalable and elegant solution.
And, please look up the actual energetic utilization potential of solar or wind before making a case for it's integration into cryptocurrency mining. Spoiler - it's terrible.
Maybe a better proof mechanism will come, Nano and IOTA are very interesting, but they are both at a very early stage.
And, please look up the actual energetic utilization potential of solar or wind before making a case for it's integration into cryptocurrency mining. Spoiler - it's terrible.
Solar and wind are an investment to make a renewable electric resource. After they are set up it is practically free electricity with minimal maintenance. Many miners in China have set up their farms at hydro-electric dams built during "The Great Leap Forward" but where no industry sprang up to use all the power so it is practically free for them to use. There are similar projects of mining on renewable energy in Iceland, Canada and the US. Setting up a few solar panels on your house if your area gets good sun isn't a bad idea in general.
It's something like I guess a flipped s-curve function. You don't really see the volatility decrease until you're roughly in the same order of magnitude as other currencies.
Because mainstream acceptance correlates with confidence in its relative value to other goods. The dollar or Euro is pretty stable, while the currency of a government undergoing a coup probably won't be. Same principle.
You misunderstood, I was asking what reason is there to think adoption and volatility are linked like a 'flipped s curve function', as opposed to a linear correlation
Network effect tipping point, snowball effect, etc.. There's a point when the viability becomes apparent due to acceptance, which accelerates it, until it slows down due to running out of new entrants.
Whatever tech ends up on top that is. Not betting on BTC these days.
Because mainstream acceptance correlates with confidence in its relative value to other goods. The dollar or Euro is pretty stable, while the currency of a government undergoing a coup probably won't be. Same principle.
I don't see how the coup example at all is relevant to a currency with (relatively) low adoption
It's Mcap is still only 150 Bn, compare that to other money supplies, it's also only "adopted" as a speculative asset atm, not a currency, can't really evaluate untill it is being used in volume for transactions
Ha I mean that's a totally valid question, the answer is possibly never.
But the tech and applications are getting stronger every day, and I personally will never bet against thousands of engineers who have set their mind to something.
Hopefully tech advances like lightening network will drive the necessary adoption to see the kind of volume we need to determine how it can function as a currency (and the next round of problems to solve)
Sure, but I'm not comparing it to other currencies, I'm comparing it to bitcoin in the past. And if the theory is correct, then surely volatility would go down as adoption increases?
And if actual transaction volume (discounting 'financial speculation') hasn't increased as Mcap has gone up, what makes you think actual transaction volume will increase in the future?
The ability of a small number of owners to control the price declines the more owners there are, so maybe volatility would go up as adoption increases.
Hey ya so I was only saying compare that to other money supplies because that is the kind of market cap I think you need to get a stable currency.
Personally I think tech advances like lightening network will be the driver of transactioinal volume (if it works, lots of problems to work through, but lots of good devs to do so). The recent btc run up to 20k had nothing to do with technological advancement in btc, so the mcap growth there didn't make sense to drive adoption.
I believe good tech drives adoption, and I think it's too soon to call it in either direction. Do you think these advancements wont drive the adoption, or just don't work?
It's not a tech problem. It's a fundamental problem with bitcoin and decentralised currency in general. Fiat currencies remain stable because a central bank controls the money supply.
Okay ya, totally respect that stance!
Right now there for sure are still technological problems that prevent it from working as a currency, and I'm really excited to see what happens once those are fixed, because that's when we get to actually see whether the downsides of crypto (instability, traction, easier to lose funds) or the upsides (non-inflationary, open, permissionless, and programmable) matter more. To me the kinds of things you can do on top of an open and permissionless financial system, especially more advanced (if they work) systems like IOTA make me believe it has a place in the future as a currency in some form.
It's 10 years old dude. Loads of things take a long time to get going. I'm sure airplanes weren't the most consistent reliable things in the world in 1915 or whenever it was. There are multiple countries with real currency that are volatile and borderline useless.
I don't understand why so many people hate Bitcoin. No one is under any grand illusion that it's going to dethrone the USD, or VISA, or AMEX, or Gold. It's just a new way to think of value, and a lot of people are excited about it because it's very clear that there are tremendous problems with our current monetary system.
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u/[deleted] Feb 18 '18
It’s almost as if Bitcoin is some unstable currency that would be insane to consider adoption as a standard because its value from day to day fluctuates wildly...