Bitcoin or Bust? from the TTA

[fskimospy]

Apply the same logic:
What value does a piece of paper have?

It can pay taxes.

 

[Ichinisan]

It can pay taxes.

Is there a way to pay with cash? I believe it's technically illegal to send cash in the mail.

 

[fskimospy]

Is there a way to pay with cash? I believe it's technically illegal to send cash in the mail.

That’s not relevant. Dollars can be used to pay taxes. Bitcoin can’t.

More importantly though is that dollars are liquid and bitcoin is currently suffering from the obvious consequences of trying to create a second gold standard. The gold standard was horrible the first time. No need to do it again.

 

[whm1974]

That’s not relevant. Dollars can be used to pay taxes. Bitcoin can’t.

More importantly though is that dollars are liquid and bitcoin is currently suffering from the obvious consequences of trying to create a second gold standard. The gold standard was horrible the first time. No need to do it again.

Not mention I can also use dollars to buy goods and services and pay other bills with them.

 

[Ichinisan]

That’s not relevant. Dollars can be used to pay taxes. Bitcoin can’t.

More importantly though is that dollars are liquid and bitcoin is currently suffering from the obvious consequences of trying to create a second gold standard. The gold standard was horrible the first time. No need to do it again.

Ah. So you need to convert paper dollars to digital dollars that go through multiple entities and transaction fees to pay the government with it. Not unlike cryptocurrency. I haven't ever used crypto, but I suspect others like Ethereum may have lower transaction costs.

 

[Ichinisan]

Not mention I can also use dollars to buy goods and services and pay other bills with them.

There may be a time when you cannot.

Anyway, I don't think anyone expects retailers to all instantly start accepting crypto currencies.

 

[FIVR]

It can pay taxes.

It can also be used to buy real estate, set up a brokerage, transferred with minimal cost to any other country in the world in a matter of seconds and exchanged for any other currency in any country on earth. It has the backing of the US treasury which has existed for hundreds of years and in all likelihood will continue to exist for hundreds more. Oh and if you forget where it is, it doesn't just disappear for eternity - It continues to exist as a physical object for centuries if kept dry and can thus be found whether you remember where it is or not.


Bitcoin has one advantage over cash: It is very difficult for law enforcement to track. If you are doing illegal things with your money, Bitcoin is extremely useful.


I don't discount that bitcoins have value, but their value is highly inflated by hoarding and speculators. I don't personally know enough to put a value on it and I don't trade things I don't fully understand so I stay away from cryptos.

 

[FIVR]

There may be a time when you cannot.

Anyway, I don't think anyone expects retailers to all instantly start accepting crypto currencies.

Lol. Retailers are never going to accept cryptos. You'll have to stick to shopping fentanyl and automatic weapons for the foreseeable future.

 

[whm1974]

There may be a time when you cannot.

Anyway, I don't think anyone expects retailers to all instantly start accepting crypto currencies.

Oh really? When will that be?

 

[Genx87]

The value of the US Dollar against other currencies also fluctuates. Is it "gambling" to keep your money as USD?

In fact, I wonder if major USD fluctuations will be misreported as crypto currency volatility in the future?

The US dollar fluctuates in much smaller increments. The US dollar is a reserve currency because of its stability. Bitcoin is deflating at such a rate why would anybody buy stuff with it? One day you can buy 2 oranges, the next 8. This is like the Weimar republic in reverse. And if this were a real currency backed by a country all hell would be breaking loose as people horde bitcoins waiting for the bottom. But because they are hording bitcoins the bottom only keeps on going and the economy would grind to a halt.

 

[Ichinisan]

The US dollar fluctuates in much smaller increments. The US dollar is a reserve currency because of its stability. Bitcoin is deflating at such a rate why would anybody buy stuff with it? One day you can buy 2 oranges, the next 8. This is like the Weimar republic in reverse. And if this were a real currency backed by a country all hell would be breaking loose as people horde bitcoins waiting for the bottom. But because they are hording bitcoins the bottom only keeps on going and the economy would grind to a halt.

As with anything that's new or suddenly in-demand, it takes time for prices to normalize.

 

[pmv]

As with anything that's new or suddenly in-demand, it takes time for prices to normalize.

Nah. It's not behaving like a currency, the mere fact you refer to 'prices' shows you recognise that (currencies don't have 'prices'). In going violently up-and-down-and-up-again in price it's behaving like a speculative commodity. Like silver or frozen OJ. Except those things also have a real-world use-value, which bit coin does not. Even fad-driven collectables like, um, postage stamps or beanie-babies, arguably have some aesthetic value to those that desire them.

You can't just declare 'anything' that is 'new or suddenly in-demand' is equivalent to any other 'thing'. There are different kinds of 'things' and their demand follows different rules. I'm not sure what to compare bitcoin to, really, it's not like a currency with a central bank and state-tax-raising backing it, nor is it like a commodity with real use-value.
I personally regret not having a go at mining some, back when everyone on here was talking about it circa 2000 (my electiricty supply was too expensive, damn it!), just because it seems that particular speculation would have paid off... but it seems obviously a hugely speculative gamble.

 

[whm1974]

Lol. Retailers are never going to accept cryptos. You'll have to stick to shopping fentanyl and automatic weapons for the foreseeable future.

No thanks to either. Fentanyl is extremely dangerous to handle, and I have no need for full auto weapons anyway.

 

[Ichinisan]

Nah. It's not behaving like a currency, the mere fact you refer to 'prices' shows you recognise that (currencies don't have 'prices').

I was going to say "value" but decided not to because I might be stuck explaining that actual market value for anything is whatever someone else is willing to pay.

In going violently up-and-down-and-up-again in price it's behaving like a speculative commodity. Like silver or frozen OJ. Except those things also have a real-world use-value, which bit coin does not.

Again, very much like the paper dollar in that sense. The main difference is that crypto currency is new stuff and I wouldn't expect that many/most entities would use it yet.

Even fad-driven collectables like, um, postage stamps or beanie-babies, arguably have some aesthetic value to those that desire them.

USD doesn't have aesthetic value to the typical owner.

You can't just declare 'anything' that is 'new or suddenly in-demand' is equivalent to any other 'thing'.

It's supposed to be a type of currency, so it's valid to compare it to currency and to understand why one might be volatile as it is catching on.

There are different kinds of 'things' and their demand follows different rules. I'm not sure what to compare bitcoin to, really, it's not like a currency with a central bank and state-tax-raising backing it, nor is it like a commodity with real use-value.
I personally regret not having a go at mining some, back when everyone on here was talking about it circa 2000 (my electiricty supply was too expensive, damn it!), just because it seems that particular speculation would have paid off... but it seems obviously a hugely speculative gamble.

If crypto currency takes off to the point that it displaced the dollar as a de-facto world currency, I honestly don't think it would be Bitcoin. More likely a properly decentralized alternative. It's quite possible that Bitcoin will sputter and die as some more refined cryptocurrency replaces it. I expect volatility and disruption at this stage. I'm not going to write off crypto entirely when it's not fundamentally all that different from the USD.

 

[pmv]

I was going to say "value" but decided not to because I might be stuck explaining that actual market value for anything is whatever someone else is willing to pay.


Again, very much like the paper dollar in that sense. The main difference is that crypto currency is new stuff and I wouldn't expect that many/most entities would use it yet.


USD doesn't have aesthetic value to the typical owner.


It's supposed to be a type of currency, so it's valid to compare it to currency and to understand why one might be volatile as it is catching on.



If crypto currency takes off to the point that it displaced the dollar as a de-facto world currency, I honestly don't think it would be Bitcoin. More likely a properly decentralized alternative. It's quite possible that Bitcoin will sputter and die as some more refined cryptocurrency replaces it. I expect volatility and disruption at this stage. I'm not going to write off crypto entirely when it's not fundamentally all that different from the USD.

Fundamentally it is, as it isn't backed by any national government, with all the accompanying reserves of political authority and men with guns. That makes it rather more like one of those collectibles, like cabbage-patch dolls or something, that only has value as far as a sufficient number of enthusiasts want to collect them.

I never said the USD had aesthetic value, you didn't read my comment properly, I said that was the case for things whose value comes from their appeal to collectors - the thing about bitcoin is it doesn't fit any of the three categories of things that are speculated in - being neither backed by a state, nor having intrinsic use value like a precious metal, nor having intrinsic aesthetic appeal like works of art. I can't immediately think of a good historical analogy to give an indication of how it is going to work out.

It's also why its value has been so volatile. National currencies only experience that degree of instability in times of massive national crisis, e.g. Weimar or Mugabe's Zimbabwe.

The multiplicity of different crypto-currencies is another bad sign. But I'd guess that they are neither going to disappear, nor become a stable currency, but just continue as they are, used particularly by those dealing in illegal goods.

 

[fskimospy]

I was going to say "value" but decided not to because I might be stuck explaining that actual market value for anything is whatever someone else is willing to pay.


Again, very much like the paper dollar in that sense. The main difference is that crypto currency is new stuff and I wouldn't expect that many/most entities would use it yet.


USD doesn't have aesthetic value to the typical owner.


It's supposed to be a type of currency, so it's valid to compare it to currency and to understand why one might be volatile as it is catching on.



If crypto currency takes off to the point that it displaced the dollar as a de-facto world currency, I honestly don't think it would be Bitcoin. More likely a properly decentralized alternative. It's quite possible that Bitcoin will sputter and die as some more refined cryptocurrency replaces it. I expect volatility and disruption at this stage. I'm not going to write off crypto entirely when it's not fundamentally all that different from the USD.

I’m still trying to figure out what it does better than the money we already have, other than buy drugs. I can’t imagine why any society would switch to a crypto currency as that would be like putting yourself back on the gold standard, and there’s a reason nobody uses the gold standard anymore.

It’s volatile, expensive to use and produce, etc. At one point it served as a reasonable facsimile of money (albeit a worse one) but not anymore. Now it’s just...what? A vehicle for speculative investment?

 

[pmv]

I was going to say "value" but decided not to because I might be stuck explaining that actual market value for anything is whatever someone else is willing to pay.

Also, not sure what you are trying to say here. That's an explanation that doesn't actually explain anything. The relevant question is 'what determines how much someone else is willing to pay'. People don't arrive at their valuations of things on a completely random whim.