Current market capitalization in US dollars:
Global M2 money supply over $90.0 trillion [a]
US dollar M2 money supply $13.8 trillion [b]
Euro M2 money supply $13.2 trillion [c]
All coins and banknotes in circulation $7.6 trillion [d]
All gold ever mined $7.1 trillion [e]
Bitcoin under $0.2 trillion [f]
Bitcoin has very different, unique characteristics compared to the other money-like assets on the list. For example, like gold, Bitcoin's continued existence doesn't depend on the good management of any national economy; however, unlike gold, bitcoins are digital so they can be encrypted, backed up, emailed, etc. Bitcoin is truly a new kind of money-like asset.
The trillion-dollar question is, to what extent does the world need a money-like asset with Bitcoin's unique characteristics to function in the 21st century?
[a] http://money.visualcapitalist.com/worlds-money-markets-one-v...
[b] https://fred.stlouisfed.org/series/M2
[c] http://sdw.ecb.europa.eu/reports.do?node=1000003501
[d] http://money.visualcapitalist.com/worlds-money-markets-one-v...
[e] https://www.fool.com/investing/2017/08/17/how-does-bitcoins-...
There is more or less the same places where to spend it as there was 4, 5 years ago. And they all have about the same traffic, which is nearly zero.
Most people only use it for speculation. This can't end well.
I also get paid in bitcoin thanks to bitwage. It's easier to get good (figurative) raises this way instead of depending on your boss x-) If you're wondering how the hell I'm so crazy to "bet" my salary on this, check this shower thought: https://www.reddit.com/r/Bitcoin/comments/79zy2d/shower_thou...
Is anyone else fatigued by repeating the same arguments over and over forever? If I just state them here once maybe we can talk about new ideas (pro or con, doesn't matter).
1) There are no "real" cryptocurrency transactions
2) It's all speculation
3) There's no intrinsic value
4) Tulips I say, TULIPS!
5) If you can't pay taxes with it, it's not "real money"
6) Governments will shut it down
7) Transactions aren't really private
8) Mining uses more energy than entire nations
9) Nobody will ever spend a deflationary currency
10) It's only useful for drugs, assassinations, gambling and ransoms
11) It doesn't scale, not enough transactions per second, blockchain will get too big
12) It's too volatile to be useful
13) Since the exchange rate keeps rising it's not useful for payments
14) Since I can't buy coffee with it it's not useful
15) Since fees are high it's not useful
16) It's a scam, Ponzi, pyramid
17) The "market cap" is (a) too small to be relevant, (b) evidence of a bubble
18) Will never completely replace gold / national currencies / corporations so there's no value
19) There are a lot of shady exchanges that (a) get hacked, (b) steal customer deposits, (c) are secretly insolvent
20) If the cryptography gets broken / bugs or exploits are discovered and the whole thing goes to zero
Maybe so many new people are just now getting involved that we keep rehashing a decade of stale thinking?
Let's talk about some new ideas!
I respectfully disagree with the idea that Bitcoin's killer-app is to be used as a currency for transactional purposes.
I can't really think of many reasons why you would use crypto to pay for a coffee or a sandwich if you live in the West (or frankly, even most developing nations).
On the other hand, I can definitely see the utility in a censorship-resistant digital medium to store wealth. To me, this latter use case has much, much more potential to serve the unbanked (as well as the banked).
Some use cases I can think off the top of my head:
(1) You are from Syria and need to flee war and escape into Europe – however bank transfers into Europe are almost impossible if you are a common Syrian. Bitcoin allows you to take your wealth with you, in your brain, as you escape across the border, by just memorising your twelve word private key.
(2) You are from Venezuela or Zimbabwe – The government has issued capital controls and is devaluing currency by the day. You transfer your wealth into Bitcoin in order to offset capital erosion due to hyper-inflation. When the situation stabilises, you transfer your Bitcoin back into fiat.
(3) You are Saudi billionaire Al-Waleed bin Talal. The government freezes all your assets in a political coup. If you have a portion of your wealth in Bitcoin, you could protect them from government expropriation and anonymously transfer them to associates or family members abroad.
(4) You are whistleblower Julian Assance and have been cut off from the financial system as a way to censor your speech. Bitcoin allows you to have an unbreakable digital "Swiss bank account" that the authorities are not able to reach.
This reminds me of Peter Thiel's recent words about Bitcoin: "it's like a reserve form of money, it's like gold, and it's just a store of value. You don't need to use it to make payments."
Reference
[1]: https://www.cnbc.com/2017/10/26/bitcoin-underestimated-peter...
I can think of one: if you get paid in Bitcoin, having to buy some GBPs just so you can buy a coffee or a sandwich is a hassle.
If you had the choice between a form of currency not controlled by a bunch of extremely corrupt entities that is much more convenient and cheaper in terms of storage and transactions, why would you use traditional money? I can't even transfer money to my friend overseas, it is too difficult.
At least three of those payment acceptors also make to US top 25 list for traffic (Microsoft's bing, reddit, wikipedia) so they aren't exactly zero traffic, either.
https://99bitcoins.com/who-accepts-bitcoins-payment-companie...
I don't even have a dog in this fight, as I don't own any, but this is blatant misinformation.
I just paid my 25k rent deposit using bitcoin too, it was much easier than dealing with a SWIFT wire. It took only minutes for the landlord to be confident that he’s got the money.
I’ve been living without personal bank accounts for multiple years now, and thanks to bitcoin it’s been pretty great.
And no, I won’t be crying if bitcoin drops back to $300.
Bitcoin market is still minuscule comparative to gold, and while most will point out that it doesn't work amazing as a currency, if it gets to like 50% of the current gold market, it is going to be worth a lot.
Gold will cease to be meaningfully scarce if we ever mine an asteroid or something like this, but the barriers to that are obviously somewhat higher.
Am I missing something or is the hacking part nonsense?
Yes, bitcoin has uses. (Including some cool, elegant and potentially very significant ones.) But despite the troubled state of the world, it does not appear to me that anything has happened that would justify the current ongoing explosion in price.
For an example of a mania in action, take a look at the price spike in tulip bulbs in the early 1800s: http://www.thebubblebubble.com/tulip-mania/
People don't think that the network today is +17% more valuable, but rather that the chance of Bitcoin going to zero in the next 20 years is 17% less.
Institutional investors building positions in Bitcoin makes a strong case for long-term viability, because if the govt tries to mess with something in everyone's mutual fund, the financial lobbyists will push back strongly.
I'm not really taking a position on whether its a bubble or not, though. My gut says yes, but it also said so back when it was $5 (having risen rapidly from nothing to "break the dollar", then up 5x more pretty quickly).
Do we have anything new to add at each 1K step announcement?
3 years later and it looked like I made the wrong choice. I don't have $10,000 just hanging around to buy into one whole coin.
Oh well...
- Decide what you think a bitcoin could be worth in X years
- Multiply that by the probability that outcome occurs
- That's your 'fundamental' price
Ex. if you think bitcoin has a 10% chance of being worth $100k in the future, it is rational to buy at prices up to $10K.
(some time-value of money handwaviness, but can be a useful way to look at things. ideally should be compared against other investments)
Bitcoin can be broken up. You can buy 0.01 BTC for $100 if the price is $10k.
A few years ago I brought a little bit of altcoin and 'believed' in it. I only put a small amount but I still was nervous spending money on some 'pretend' digital asset. Within a few days it was worth half what I started with. Thinking I was in a low point of the chart, I invested a little bit more.
It then dropped again, so much I lost around 80% of the value within a week.
I then declared the money lost and saved my private keys.
Fast forward to the beginning of this year, I randomly picked up my private key from a backup drive that I was going to wipe and decided to check it's value.. around £15
As it was such a little amount I decided just to cash it out, buy a pizza and continue with my life. However, as it wasn't so straight forward to just 'cash out' I left it.
A few months later I hear the news that bitcoin is rising so checked on my altcoin (because the altcoin charts followed closely to the bitcoin charts), and there you go, I tripled my initial investment. I still declared the coins 'dead' so wasn't worried about losing it, but converted them into bitcoin as that felt most secure to me. The conversion lost me some percent but I stuck it out and have had 0.1BTC in my wallet since.
It's nice watching my little amount go up. It's not a deal breaker if I lost it, but it's now more 'alive' than 'dead' to a point I have started thinking about converting it into fiat and enjoy a good Christmas. But there is that little bit inside me now, that refuses to listen to my 'the coins are dead, and I wouldn't really lose anything' mentality which is unfortunate because I feel as the price goes up that feeling will cement harder to a point I would never cash it out.
Other than buying purely for speculation, does Bitcoin really have any purpose right now, at scale? Geniunely curious.
That's huge. Bitcoin is to money what the internet was to communications.
It offers massive, tangible benefits. Money that is not controlled by corrupt institutions completely changes the game.
There is an entire industry being built around it. Thousands of engineers are creating new businesses as we speak.
It has different properties to stocks. The more people that convert their money to bitcoin, the more use it has. This is a basic property of currency. While people will say you can't buy much with it now, the very fact that massive amounts of people are now acquiring bitcoin gives incentive to people to start accepting bitcoin as a form of payment.
Most governments can now no longer make it illegal. The horse has bolted. By the time it is made illegal, millions of people will have bitcoin and you will be committing political suicide. They will try to regulate it in a way that benefits large corporations though.
I believe the transfer of money away from questionable stocks like facebook, into something based on real value like bitcoin, will crash the share market.
It's certainly enough to be an everyday currency for the people who want to use it as an everyday currency at the moment, and Lightning Network will expand the capability massively.
Ha. Wait and see.