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[Sheb]

All kind of stuff can have value. Value is needed, but not enough to make a currency. That doesn't make 1952 baseball cards, tulip bulbs or bitcoin currencies in any meaningful sense.

[Maximum Spin]

Yes. The US Dollar is the WMF reserve currency. If it removed its promisary notice, then the WMF would SERIOUSLY degrade the currency, causing a massive panic of selling holdings of the currency.

I said "using", as in for ordinary transactions, not holding.

All kind of stuff can have value. Value is needed, but not enough to make a currency. That doesn't make 1952 baseball cards, tulip bulbs or bitcoin currencies in any meaningful sense.

The thing that makes it a currency is that people trade it. Like "cigarettes are a currency in prison". So, bitcoin is a currency.

[Sheb]

All kind of stuff can have value. Value is needed, but not enough to make a currency. That doesn't make 1952 baseball cards, tulip bulbs or bitcoin currencies in any meaningful sense.

The thing that makes it a currency is that people trade it. Like "cigarettes are a currency in prison". So, bitcoin is a currency.

Not really, people trade all kind of things from oil to grain future to stocks to artwork. That doesn't make them currency.

What you're pointing at is one of the three roles of a currency, being a medium of exchange (the others roles being store of value and unit of account). That is, something you can use to trade for good or services. Bitcoin is sometime used as a currency in that sense but that use is very limited, because bitcoin is a crap currency in that sense. For starter, the system only allows ~7 transactions per second. Then, the volatility of bitcoin makes it unsuited for that (do you really want to set a price in bitcoin for anything? Your stuff could end up stupidly expensive or cheap in a day). So really, prices are set in dollars or some other currency, and bitcoin is mostly used as a way to transfer said dollars for illegal activities.

The use of bitcoin as medium of exchange is marginal at best, no one uses it to buy anything but drugs because it's so unwieldy. The vast majority of trade in bitcoin is from people trying to make money off the bubble, not using bitcoin to buy stuff.

[SmithE]

(spam removed)

[Maximum Spin]

Can versus do. You can buy various things with Bitcoin, yes.

Doesn’t mean people do.

People definitely do, I know some.

[Dorsidwarf]

I don't understand your prison cigarette example. How do the cigarettes represent "debt to whoever you traded with"?  I thought the backing behind that kind of currency was the fact that the currency itself is a desired commodity (like if the US government declared that the new currency was ice lollies)

[Loud Whispers]

And of course, you can follow the rabbit hole. When the "gold standard" existed what gave gold value? Why could you eat like a king if you own yellow shiny rocks? It's nonsensical. You can't eat gold, and the industrial uses don't account for it's value. It's only worth "stuff" because we agree that gold is worth "stuff". In the end, gold is just a lumpier, heavier version of worthless paper money.

Caliph Al-Mustaʿṣim, the last independent Abbasid Caliph got invaded by Hulagu Khan, grandson of Genghis Khan. Unfortunately for Bagdhad, Al-Musta'sim was a fatuous Lord, decadent and incapable, much like the average lord in CKII. Al-Musta'sim vastly underestimated the threat the Mongols posed, thus by the time he started negotiating, the Mongols were already at his doorstep and were disinterested in anything except total destruction. After a lengthy despoiling of the city and ritual humiliation of the Caliph, they locked him in a room, where starvation soon began to overcome him. Begging for any food or water, they brought Al-Musta'sim a platter full of his own gold. Al-Musta'sim was confused, at which point Hulegu flew into rage, asking Al'Musta'sim if he could not eat it, why did he hoard it? Why did he not spend his gold paying for more troops? What good were Bagdhad's walls without men to defend them?

[Egan_BW]

^{_{And that's why the rich should keep vaults full of ramen and beef jerky.}}

[Mictlantecuhtli]

A shame I never have champagne around (or that I don't like champagne in the first place, but whatever); it would make for a great celebration once this bubble inevitably pops.

I remember saying this in 2013. Very, very distinctly remember.

The blockchain is an immutable digital ledger secured from computers hashing an algorithm and being rewarded for their effort in the form of the currency. Nothing more nothing less. Your pendantic rambling does not affect the inherent value of frictionless decentralized infinitely divisible units of currency able to be used to purchase any good you could desire. In your example, cigarettes should be able to be moved from one end of the earth to the other with negligible fees, which would give them more value than just for using. Take into account these products are inherently deflationary, and you've got a mix for the greatest financial cocktail of all time.

If someone had sat me down and explained to me what a digital ledger (blockchain) was and how coins are used to incentivize the process of running the blockchain (mining) then I wouldn't have made ridiculous posts in 2013 about Bitcoin being a bubble.

[exdeath]

Digital coin (single one) will be used at the entire world at the place of normal money. Mark my words.

[Mictlantecuhtli]

I'm well aware of how a blockchain works. Fancy technology does not fix the fundamental problems that these things have. Besides, blockchain has been rendered into nothing more than a buzzword.

You make it out like the blockchain is some magical force of godly superpowers. It's the idea of encoding the hash of the previous transaction into the hash of the next transaction. That's it. It's really goddamn simple. Bitcoin mining gets "harder" because you're having to decrypt the entire transaction tree to confirm every new transaction.


Your ideological rambling about the benefits of "frictionless decentralized infinitely divisible units of currency" does not change the fact that of the people who own the stuff, an incredibly small fraction are actually using it for its purpose. And, to be frank, those people are idiots, because they're losing out on the benefits if they simply just hoarded the crap and sold it when the value inevitably jumps up another order of magnitude.

The fact that you consider a near-freely internationally-transactable currency with more liquidity than the american bond or stock market merely "ideological points" instead of rock-solid foundations for the new era of currency encapsulates your ignorance of the matter, friend. And to blasee state that "governments will run it" also ignores that the free market is the market driving crypto, not government QE. Which is more legitimate in your view, the US federal reserve notes printed day in day out by faceless unknown bureaucrats, or a currency that is as it always will be as it's created (reservations about Satoshi? Then buy Litecoin, it has a face and a public CEO)? There's alot of ways to view crypto and you're falling back to the safest kneejerk reaction there is. The one I was at 5 years ago.

I can safely say it is a godly force that is freeing many people from the constraints of despotic governments which take pride in lording the financial status quo over the poor.

[milo christiansen]

The transaction confirmation delay is the real killer.

[MrRoboto75]

The transaction confirmation delay is the real killer.

The real killer is that I'm hungry and can't buy a sandwich with my dogecoin.

[Jimmy]

The transaction confirmation delay is the real killer.

Exactly. As untraceable (and therefore tax free) international barter good, Bitcoin and its ilk are ideal.

As a daily medium of exchange for multiple purchases, fiat currency will remain king unless and until cryptocurrency resolves the delay between the buyer authorizing a transaction and the seller receiving the funds.

Fiat currency will always have a value because it can be used for payment of taxes. Taxes, just like money, are an imaginary construct created by those in power. We pay these with their other imaginary construct, money.

As soon as you can pay your taxes with Bitcoin, it will be a legitimate type of money. Until then, it's a commodity, and a highly volatile one at that.

I wish I'd invested in it ten years ago as well, but there's always going to be high risk investments you'd wished you'd put money into in hindsight, whether it be the stock market, lottery tickets or horse races. I'm not gonna lose sleep over taking the lower risk option.

[Antioch]

The transaction confirmation delay is the real killer.

Exactly. As untraceable (and therefore tax free) international barter good, Bitcoin and its ilk are ideal.

As a daily medium of exchange for multiple purchases, fiat currency will remain king unless and until cryptocurrency resolves the delay between the buyer authorizing a transaction and the seller receiving the funds.

Fiat currency will always have a value because it can be used for payment of taxes. Taxes, just like money, are an imaginary construct created by those in power. We pay these with their other imaginary construct, money.

As soon as you can pay your taxes with Bitcoin, it will be a legitimate type of money. Until then, it's a commodity, and a highly volatile one at that.

I wish I'd invested in it ten years ago as well, but there's always going to be high risk investments you'd wished you'd put money into in hindsight, whether it be the stock market, lottery tickets or horse races. I'm not gonna lose sleep over taking the lower risk option.

Actually several governments have taken steps to ban cryptocurrencies all together.