Bitcoin is fundamentally not a cash alternative. Which means definitionally the alternative to holding onto $100 BTC is NOT holding onto $100 cash. In fact cash is intentionally inflationary and BTC is intentionally deflationary (over long enough time scales) so yeah, you'd win your silly bet if there's no major crash. Doesn't mean you'll come out ahead of other strategies.
The problem with bitcoin is specifically that it is deflationary. In over simplified macro economic terms when you have deflation it is in the consumers interest to not spend money, because the cost of a service or good will be lower in the future. So the longer you wait the more you save.
You have the same issue with Bitcoin, because it is deflationary it is in the holder's interest to not spend it, because it's future buying power will be increased.
So if you look at how bitcoin was distributed you have early holders that have a tremendous amount and have been rewarded for it.
Add to that speculation and you have this whole cycle ramped up on steroids, with huge swings up, and then down, and all the while the value continues to increase because it is designed to do so.
The problem was that bitcoin tried to solve two problems, but should have only solved one.
The first problem was how to transfer value in an untrusted network which was a great success.
The second, was unneeded, which is to make it deflationary as some sort of perhaps response to the inflationary world we live in.
But the reality is that the inflationary world was designed by economists so that wealth continues to circulate. Yes, there are still issues. Yes we have imbalance. But inflation does case wealth to circulate, though not as quickly as some would hope for.
In bitcoin, you have the exact opposite, wealth gets accrued to early backers and just sits there.
There is hidden inflation that comes from other crypto currencies.
Once Bitcoin inflation is too strong and people are not willing to sell, it becomes profitable to start another currency. That currency will absorb liquidity and the deflation of BC stops. Like information in the internet, value flows around obstacles.
Bitcoin's supply is disinflationary, with the yearly supply inflation rate going toward 0 (and reaching it in 2140).
But so is a constant emission, the major difference being that the latter goes toward 0 a lot slower, e.g. taking 50 instead of 12 years to get below 2%.
More importantly, it accrues wealth to late adopters as much as to early backers, combining a fairer distribution with reduced spending aversion.
This assumes that every bitcoin ever mined stays in circulation. We know this isn't true. We know that millions of dollars of bitcoin have gone missing, never to be recovered. And if Bitcoin is the real deal (it probably isn't) then we've only just started. If this thing hangs around for decades or even centuries we will see trillions more go missing.
Yes, taking lost bitcoin into account, the supply inflation rate is maybe 25% lower, and long before 2140, emission will be too low to compensate for ongoing coin loss.
In this model of inevitable coin loss, the alternative constant emission will eventually, perhaps in 50 to 100 years, reach a rough equilibrium where yearly emission roughly balances yearly coin loss. Like a softcap instead of a hardcap.
Funny, I built a fintech startup on helping the cannabis Industry from their supposed 'cash' problem(s): predominately having too much of it and not having banking, or having thier cash taken indefinitely by the bank/paypal upon closure of their account(s). While also doing B2B transactions where banks/CC companies failed to lend them services, despite having Local/State laws permitting so. None of which Cash seemed to prove as useful as you think it is.
I think you're looking at this the wrong way: rather than looking at it as a paradigm shift in what programmable money can do, you are measuring Bitcoin by how it fails to function (or dysfunction) as your local Fiat currency does.
That's a very poor measure/metric, as for being able to use it day-to-day, provided you're willing to operate within a KYC/AML system, you can have Visa Credit Cards that draw from your source of BTC in real time/previously loaded, depending on what service you use.
Merchants who accept Bitcoin is a constraint, mainly a tech related one, but just like how many restaurants now take UberEats/Doordash/GrubHub that amount to a growing/large(r) percent of their revenue (moreso when States are limiting restaurant hours or outright operation to online orders only [1]) you will see new use cases appear which Bitcoin's layer 1/2 can utilize natively as a private p2p system.
I think its very telling that despite guy's like Jack Dorsey backing Bitcoin, who I think understands the fintech landscape, and has been orientating Square to be integrated and compatible with it many of you still refuse to see the shift has already happened.
Price drops happen in Bitcoin, I've been in this long enough that it doesn't phase me anymore; and is the only real antidote to the supposed 'what about the early adopter whales' issue people bring up, personally I'm using some of my discretionary budget to buy more.
I'm not here to convince you to use Bitcoin, or why it would work for you/your business: I'm just pointing out why what you said is skewed and not framed correctly. Otherwise you'll have to do what IBM did: offer a good salary for consultant fees to do so. :)
I tend to measure bitcoin by how its proponents sell it. It has failed at all of these things -
Being a fast/cheap payments network
Being a decentralised cash equivalent
Being a store of value
The shift hasn't already happened - large businesses that have accepted bitcoin in the past have almost all stepped back from it citing a variety of problems, but mainly boiling down to it not being worth the effort, and nobody using it.
And why would they? It's inflationary in theory and speculative in actuality, anyone that actually thinks BTC is the way of the future would be a fool to part with it.
> ...anyone that actually thinks BTC is the way of the future would be a fool to part with it.
Namely these mainly Silicon Valley based Billionaires: Jack Dorsey, Peter Theil, Ben Horowitz, Andreessen Horowitz, Tim Draper. Add Mark Cuban in there, too if you want, but he's not SV based.
Seriously, if you want to put your money where your mouth is I can essentially prove your 1st/2nd points right now. The 3rd will take longer as a store of value is relative to the period you bought, so by default needs time to accrue value.
I'm game if you are, here is my address if you want to make it happen:
I have no bitcoin and would never give one red cent to the shabby, frequently fraudulent outfits that call themselves exchanges in order to obtain any.
You have fun now with all that name dropping. The track record of cryptocurrencies so far has quite thoroughly shown me and most of the world AFAICT that those points are a bust. It's worse than the systems we already have, in pretty much every way.
I note you don't actually address the points made either.
> I have no bitcoin and would never give one red cent to the shabby, frequently fraudulent outfits that call themselves exchanges in order to obtain any.
Not that I entirely disagree with your sentiment, but do you realize the biggest exchange in the US/World is actually a YC backed venture based in Silicon Valley?
You're the one that said they were 'fools to be parted with,' yet these are the very VC titans of the Silicon Valley most of you adore, I just took the time to name a few who you were referring to. I personally don't care, they're just like any other person to me.
> I note you don't actually address the points made either.
Not if I'm not paid to, no; I'm a professional, and I'm compensated for my labour/skill set, why would I bother to if I'm not compensated for my time/effort?
I wouldn't ask you to build me a iOS app that I think currently is not available because 'Apple sux, lol' and expect you to do so solely because of my views may contrast with your own. I know you are paid well for what you do, so why ask such an absurd request?
Moreover, I could just prove it to you in practice far more readily rather than just provide a written counter-argument. But you have declined.
Again, this comes down to not wanting to base any of your assumptions beyond anything than just simply stating them to be fact; there seems little to no foresight or effort in them and they seem mainly sensationalist and reactionary.
What's even worse is how broadly you guys generalize things, rather than say: right, I don't understand how this technology benefits me directly, but I can see how it would given the circumstances of someone else. That's my problem with most of these ill-informed criticisms, you cannot see beyond your own position and circumstances, often until it's too late.
Sidenote: Had you purchased BTC 8 hours ago when I made that post, the 'store of value' of your purchase would have yielded an increase in 8% in a matter of hours while everything else in the stock market and fiat currencies is tanking.
> Had you purchased BTC 8 hours ago when I made that post, the 'store of value' of your purchase would have yielded an increase in 8% in a matter of hours while everything else in the stock market and fiat currencies is tanking.
Wow, now you're using the massive volatility as if it's some sort of benefit for something you're selling as a 'store of value'
If I'd bought a month ago I'd be down 50%.
You really are off on one.
Also that's hilarious "I won't address your arguments on the internet because I get paid for that, so I'm just going to tell you I already won the discussion without actually taking part".
LOL. Amazing.
The foresight you claim has had over ten years to play out now, and we've just had failure after failure after failure. The world has not been changed by it. It's time that the players in this space demonstrated real benefits or stopped the grandiose claims. Preferably both.
cryptocurrency is what alchemy would look like if it appeared in 2008 instead of the 13th century. Both are the work of people who work up ever more complex technical arguments from fundamentally invalid premises, who try to reify these prwmises by endlessly tweaking their implementation apparatus instead of rethinking their assumptions from first principles.
both phenomena even ascribe these first principles to color coded documents purportedly authored by mythical, pseudonymous departed sages, the emerald tablet of Hermes trismegistus and the white paper of Satoshi nakamoto.
Because Bitcoin is inherently deflationary and there is incentive to not spend it, that pushes its purchasing power into socially/legally marginal areas of the economy. This is why it's the transactional unit of choice for online illegal drug purchases, prostitution, extortion/ransom demands, etc.
All of this of course, makes Bitcoin even more socially marginal. But yes, this is an area where Bitcoin excels for purchases.
(and to clarify, this is not to say that I personally think that drug purchases should be illegal although I have no problem with extortion demands being illegal, just pointing out the place of such transactions in the social milieu as it exists)
No. In the same way that my directions to the mall don't include "maybe take this turn" at all turns.
That is, in many (all?) imperative lists of steps for how to accomplish something, I often do not want to acknowledge that every step could fail. Rather, I would like for a failure to be something I can touch and reason with. Possibly restart from.
Why did I not take that turn? Because I need gas. Or the kids need to use the bathroom. Doesn't matter, too much. I'm the user. Give me my options at this point. (And as a real user of maps, also give me the option of "piss off for 10 minutes.")
(Yes, I like the condition/restart system of common lisp...)
> No. In the same way that my directions to the mall don't include "maybe take this turn" at all turns.
I think that's a really poor and simplistic comparison. You're content not considering every possible outcome of trying to go shopping because in the face of changes to your circumstances, you can easily come up with a new strategy and adjust your goals on the fly.
> I often do not want* to acknowledge that every step could fail.*
That's what you want, but I have often found that the demands of quality software are different. I've seen too much software end up in strange and unconsidered failure modes because it threw up at the wrong time.
I should say that my want there is local to the directions. For the trip, I definitely want them handled.
So, for the function, I want to be able to say the happy path. I would also like to be able to say what could go wrong, with advice to the user on how to proceed.
I don't think options really serve the same purpose as exceptions. If you have are just passing up None or whatever up the call stack over and over again, you probably should just be using an exception. If not, then options are fine. I use options for normal behavior (a missing file, for example) that perhaps can be corrected or handled in a different way. I throw an exception if I want to just crash the program. I rarely ever try catching exceptions, except in maybe some top level driver function. Oh and to all the programmers out there who wrote the code I'm currently dealing with: please don't use exceptions for flow control, it's a terrible terrible idea.
That means those events that are very far from the happy path and need to be recovered by unwinding down multiple function calls until a safe point to recover gracefully is reached. These are events such as failing to allocate memory.
I think those are awful to deal with errors. You have one part of the code that handles one concept and could error something. However the result of that code is then handled to some other part of the code which might deal with a local error but now you really don’t know if the error was local or occurred in the other part of the code. The second part of the code is now dealing with an error situation which it shouldn’t and you’d need to write weird code to stop it from doing that. Also you introduce behavior caused by two different context but merged due to the language “features” which, I think is much worse, because it’s not obvious that it just happened. Using exceptions otoh fixes this and parts of the code can still be completely oblivious that errors can occour.
Which is why Result and Error types exist. With those you get both the context of the error as well as making it clear that the code you are entering needs error handling to be safe. Much less of an issue than calling code that unexpectedly raises exceptions.
And they do have their uses but they are not good enough by their own. Having both exceptions, result types and maybes is a lot better to have and to use appropriately than only have one or the other.
I heard related issues called boolean blindness. You drop every bit of useful error information and leave only result/no result or true/false. Want to load a file and it fails? Access rights? Parsing Error? File doesn't exist? User interrupt? Can all be summed up as an empty Optional, completely useless for any kind of automated or manual recovery or even to decide if recovery is necessary (user interrupt).
and in those langs its trivial and very common to make even more elaborate return/result types containing a very precise representation of all possible result categories.
That's true of the stock market and every other market. For stocks, a bunch of market makers of major financial firms set the "market" for these stocks. The same for forex, commodities, you name it.
Of course and I could say "that labeling law" or something. Point is: The short length is nice for consuming tweets, but you can't use it for discussion. Quoting that term was ment for emphasizing.
