Thanks for the post (genuinely) and I agree this does seem like a legitimate use of Bitcoin. I have to ask you however, did you not find it a bit strange to have to "dig into" the question of the uses for Bitcoin?
Thanks for reading it and replying. Well I had heard of purse.io previously but had not used it as I was suspicious, what I had to dig into was the reason people were willing to pay a premium for bitcoin using it. The reason I didn't know that is as I said, I'm part of the 1% in a first world country, so I had no idea about the need for people in Indonesia to earn income working remotely for amazon or the difficulties they have liquidating their payment into local currency. When something is completely global like bitcoin you have to consider all the possible use-cases globally and you can't do that without some digging.
And if so, how on earth does the price explosion seem justified? The use you have outlined may be legitimate (as opposed to most other Bitcoin transactions I would guess), but it's still kinda niche isn't it?
The price explosion is largely unrelated to purse.io or any other 'medium of exchange' uses of bitcoin, it's to do with the speculative 'store of value' use. In fact the 'medium of exchange' uses CAN'T grow right now as bitcoin is already constantly bumping off the daily transaction limit. It was like this before most of the recent price run up, so I don't expect any significant part of the recent rally to be due to an increase in demand for bitcoin as a medium of exchange, and the uses for that will remain niche until there is a drastic improvement to the transaction capacity of bitcoin.
Many people speculating on the price will leave when it's no longer going up (i.e. when the current bubble bursts), but those niche uses as a medium of exchange will continue, and be more attractive as fees reduce, until something else better serves as a medium of exchange.
I guess the other reason why the price has gone so high, is the "store of value" argument. But again, what's behind this? Why has gold not risen too, or are wise & conservative holders in gold dumping their assets for Bitcoin?
There are probably a mix of reasons:
- While gold is scarce, it's nothing like bitcoin, especially if you are comparing ounces to bitcoins. There are apparently 2500 tons mined per year, which is 80million ounces (Someone correct me if I'm wrong on that, it's more than I expected!)
- Gold (in it's use as money) already reached market saturation a long time ago, and the demographic is probably older. Every day some old timer goldbugs die, and some teenagers get their first crypto.
- Gold has been getting relatively less practical in terms of it's 'medium of exchange' use as technology progresses - not just crypto. If someone in Kenya is using m-pesa on their phone to pay for things, it makes gold seem all the more impractical than it did beforehand.
- Some people are definitely either diversifying some of their precious metals to crypto, or moving to crypto entirely. Many early bitcoiners were goldbugs first.
- This one may or may not be a valid point - I haven't researched it thoroughly yet, but I'm skeptical of how the gold price is determined. Gold is so impractical as a medium of exchange that it can't even find a price in real time on the free market like bitcoin can. This has two consequences - many people buy paper gold instead of gold and the price is calculated and published as a spot price.