DazedInPontoon
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My point is that holding it for speculative purposes is using it.
"If crypto is not the answer to our money problems, what is?" Good FT article
- Thread starter Brendan Burgess
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So what do you use it for?
If I bought a classic car and kept it under a tarp in a garage would I be using it or holding it as an investment?
DazedInPontoon
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Assuming you were doing so with the intent of some time later selling it again you would be using it as a store of value (and perhaps using it a collectible - some people get a warm fuzzy feeling merely from knowing they own something even if it just sits in storage). You would not be be using it as a mode of transport. Some things such as a classic car, can be used in multiple ways.
NoRegretsCoyote
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I have a painting on my wall that I like to look at. I might sell it some day. But a painting is not a means of payment or a unit of account. It's a store of value for sure, but a pretty volatile one.
So don't think my "use" of a painting is vaguely comparable to my "use" of Revolut which functions for payments, unit of account, and a store of value.
So don't think my "use" of a painting is vaguely comparable to my "use" of Revolut which functions for payments, unit of account, and a store of value.
DazedInPontoon
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Volatility being only one of the many downsides of using it as a store of value. It's also non-fungible, probably has an illiquid market, is non-divisible and may deteriorate in quality over time. It may also be difficult to verify or prove its authenticity.
It's a subjective opinion as to whether you feel that the value you find in it being nice to look at is worth all those store-of-value downsides. Personally I would never use art as a store of value.
Revolut is just a layer on top of fiat/stocks/crypto. It provides the payment function and acts as a custodian (introducing counter-party risk of course), but the unit of account and store of value are ultimately functions of the underlying fiat currencies, stocks or even crypto, that you're holding in your revolut account .
If your painting could somehow be digitally split into fractions and transmitted on a decentralized network, then it very much has some strong characteristics that would allow it to be a means of payment (with certain advantages that no other means of payment has) and maybe even a unit of account. Volatility - has been discussed to death - so I won't rake over the coals anymore other than to acknowledge that it's far from optimal - but where we disagree is that this will change over time.
You can't exchange value with me via Revolut right now or vice versa. I live in a country with capital controls firstly and beyond that, Revolut is not licensed to operate here. Someone mentioned this type of use being an 'edge case' but there are 7 billion people living in the developing world. They all have either issues with inflation, with banks going bust and no guarantee or capital controls etc - at one time or another.
I can instruct you in installing a Lightning Network wallet on your phone right now, you'd have it installed within 5 minutes and within 6 minutes I would have sent you a payment. No intermediary, no kyc - a simple peer to peer payment. There's nothing else that can do that in that way.
On using Revolut as a store of value, I think most of you have agreed that euros, usd, etc cant act as a store of value. On bitcoin - it's been debated to death - we all know the opposing sides to that discussion.
To your previous post - re. the only use for bitcoin is criminality and that there can't possibly be any other use - then isn't right now the moment that there is complete capitulation and an acknowledgement of your point IF you are correct? Although it's no fault of bitcoin, this black swan event that's just played out is a complete crap show and its tied up with bitcoin whether I like that or not. The fallout has to continue for another 6 months as we don't know who else has to fall (BlockFi raised the white flag yesterday - there's definitely some more that will go under). Sentiment is low and its been very damaging.
Against that backdrop, if your thesis is correct, then BTC will not emerge beyond $20k ever again. I know that most doubters here have said that can't be accounted for - but surely after how many of these cycles?, that can't possibly be. That would make sense maybe once - but how many times? That's not in any way normal - as in there is NO other example of something like that.
The only thing that makes sense is that there IS value and utility being developed here. Take the development of the internet which went on over decades. Some found use cases with it early on while others thought it was a load of nonsense (there's any amount of old articles out there saying how it would never work and was pointless, useless, etc.). And by comparison with what it is today, it was mostly pointless and useless back in the day.
Let me tie that in with the requests to demonstrate how anyone is using bitcoin. I want to - and I am - using it as a store of value, just like DiP. I agree that it's imperfect in that role right now over shorter timespans while over a longer timespan, it's working just fine. I also use it as a means of payment. To your point, no I don't use it much in that way - but I'm limited in my ability to do so - until more people jump on to the network.
The same with the internet. It either wasn't available to me in the earliest years that I wanted it or even when it was, it was a god awful mess (dial-up) with little utility and where utility was found, it was very much imperfect. To my point, that utility was diminished further because it still hadn't reached critical mass. All goes back to network effect - it's hard to build - and harder still where we're talking about a virtual/digital means of payment that is not just some other payment layer on top of the fiat money system.
Look for the signal amid the noise and my ability to use bitcoin in that way is improving all the time. The user experience (lightning payments were not available when this discussion first kicked up here) has also improved. But there's lots still that needs to be improved.
Recent events have shown everything that's bad about crypto. Some have lost their life savings, there's a lot of pain out there. So if there was ever a moment to acknowledge that there's nothing in this, it is right now. If you're right, then Bitcoin (and other projects on a decentralized theme) fizzle out from here. That's not my thesis. Unfortunately, some have paid a savage price (and this is not the first time - this has happened many times before) - but it's already sobered up credible players in the space to act to improve on this - and create systems and standards so that this crap show can't happen again.
This recent issue can and will be tackled in a number of ways:
- Regulation: Many think that people in this space don't want anything to do with it - but that's not entirely true. There's an acknowledgement that if an exchange is centralized - then its no different to a conventional bank. So of course, there needs to be effective regulation. Of course, there's concern in its application because if its heavy handed, it can destroy the innovation entirely or be bastardized to favour the JP Morgan's of this world (or a deluded JP Morgan wannabe as per this example) , etc.
- Improvement of Standards from Within: Within 48 hours of this crap-show unfolding, other major exchanges have come out and said they're implementing proof of reserve-based systems. In their current iteration, they're not foolproof but they go a lot of the way in proving reserves exist. My understanding is that the tech is there to develop that further still.
- Decentralized Exchanges (DEXs): They already exist but they need to become more intuitive and user friendly for regular people. Of course, the difficulty comes in the on-ramp/off-ramp with fiat money - as they can't really interact so well with fiat (just yet). More people will be using them in the future nonetheless - which minimizes the risk going forward.
- Use of Multi-Signature Tech: So that centralized exchanges can store your funds but where multiple digital signatures are required in order for it to be moved i.e. in that scenario, the likes of FTX can't treat your funds like casino play money.
A mountain of work in all of that - but I believe that's what happens next. It wouldn't happen if there's simply no point to any of this.
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Duke of Marmalade
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That's 65% nursing losses of 75%. Yep, sure is a store of value.
He said > 1 year. Last I checked, BTC has been around for quite a few years. You'll notice a few hype cycles below. None of them killed it - and neither will this one.
Duke of Marmalade
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A bit off topic. I was referring to the store of value motif.
It takes some act of faith to keep "using" it as a store of value as it falls from 70k to 16k.
another advantage of a painting is that you can always throw a can of vegetable soup at it if you wake up annoyed some morning
By cherry picking market tops? I've seen this movie before.
See above. You can decide to cast aside the cherry picked timelines and acknowledge the trend on a lower time preference any day you want Duke.
Here's another one for you that adds perspective (for those who are open to perspective of course) relative to crypto ownership/use:
Duke of Marmalade
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I understand how cultists see bitcoin as a store of value. Their numeraire is bitcoin. They measure all value in bitcoin terms. So, by definition, a bitcoin will ALWAYS be a bitcoin - the permanent store of value. They build their faith on the foundation stone that bitcoin will not be devalued by increases in supply - there will never be any more than 21 million of them. The bitcoin in 50 years' time will be to all intents the same as a bitcoin today, which of course can't be said of, say, the €, which probably won't even exist.
I thought @DazedInPontoon was on the more rational end of the spectrum, so I was surprised at her/his faith of its "use" as a store of value.
I thought @DazedInPontoon was on the more rational end of the spectrum, so I was surprised at her/his faith of its "use" as a store of value.
Duke of Marmalade
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Well, when the cherry is the last 12 months it is a bit low hanging. You're having to reach higher and higher to reach your cherries.
This is all getting a bit silly at this stage. We started off with cheerleaders going on about microstrategy and how bitcoin on the balance sheet was a sign of corporate acceptance. That hasn't worked out very well.
We had El Salvador held up next and that hasn't worked out very well either.
We have seen major financial institutions get involved in crypto and people say it is because they see the value..eh, no. They see an opportunity to make money from simpletons....
We now have people moving from saying that Bitcoin is a currency to saying it is a commodity. It isn't either.
Anyone above who says they don't understand it has hit the nail on the head. I used to sell CDO's, CDO squared and eventually CDO cubed for a living. I convinced myself that these were great products. Then I realised they were products made by people way smarter than me than who made money and ran.....People like me were left feeling completely stupid....bitcoin will be no different. People will make money but they will be the minority.....Good luck to them but i hope the social cost is worth it....
We had El Salvador held up next and that hasn't worked out very well either.
We have seen major financial institutions get involved in crypto and people say it is because they see the value..eh, no. They see an opportunity to make money from simpletons....
We now have people moving from saying that Bitcoin is a currency to saying it is a commodity. It isn't either.
Anyone above who says they don't understand it has hit the nail on the head. I used to sell CDO's, CDO squared and eventually CDO cubed for a living. I convinced myself that these were great products. Then I realised they were products made by people way smarter than me than who made money and ran.....People like me were left feeling completely stupid....bitcoin will be no different. People will make money but they will be the minority.....Good luck to them but i hope the social cost is worth it....
No. What that tells me (not that I needed confirmation) is that you're going to use that $67k high mark in every timeframe between now and whenever it meets that price target again (just as you did with the $20k high for the previous cycle). Because today you talk about 12 months - every other time, you've set X number of months to heighten the difference. Like I said - I've seen this movie before.Well, when the cherry is the last 12 months it is a bit low hanging. You're having to reach higher and higher to reach your cherries.
Bottom line is that bitcoin's volatility is far from ideal and hype cycles are unhelpful but after all is said and done, with a longer time preference, bitcoin adoption and price go up and to the right.
To have a discussion where people offer opposing views? I can't imagine how that could ever be deemed to be 'silly'.....unless of course your thinking is that it's silly because you've decided there can only be one outcome here and no other. That's the part that I find silly regardless of whether or not bitcoin ultimately fails or succeeds.
You can use the 'term' cheerleader' if you want but all that tells me is that it's use in that sentence is steeped in your own bias on the subject of bitcoin. Secondly, if you think that it wasn't worthy of discussion here, then I very much disagree. If you think that bringing that up as a significant development makes me a 'cheerleader', there's no way in the world I agree.
You'll be aware that before it ever came to pass, there had been discussion and acknowledgement that in its ongoing development, bitcoin is getting caught up with hype cycles. We knew somewhere in the Microstrategy discussion, that bitcoin was already on its way into the higher point of a hype cycle with the acknowledgement that it would hit a peak price and fall back. I assume this is how you're deeming placing it on the balance sheet as being a mistake. I don't think that this volatility is helpful but I also don't think it will always be like that.
In the case of the two entities that were discussed back then (MS and Tesla), both still hold bitcoin. As regards new entrants on that front, we know that it's far from straightforward for institutions to add it. It's still an asset that lacks complete regulatory clarity. Step by step the pieces are being put together. Regulatory clarity will have to come soon as the pressure is building in the US to sort it out. As the House of Representatives flips to red, it's looking like all of this will get sorted very soon.
Alongside that, the accountancy approach taken by corporates needed to be addressed. Just four weeks ago, the FASB decided to take a far more reasonable and accommodating approach to the treatment of assets like bitcoin.
So you've already written it off when its far too premature to do so. Institutions move incredibly slowly (and in fairness not without good reason).
According to WHO it hasn't worked out well? Yes, you'll be able to list of commentary from the IMF (who feel threatened by Bukele's move -so much so that they've warned one other country they're not to dare go down the same path while making it a condition of a finance deal with Argentina.).
Isn't it interesting that nobody gave a fiddlers about El Salvador before La Ley Bitcoin - most people couldn't point it out on a map. The moment Bukele went there, the focus was in tarring him up - yet nobody cared that this three predecessors all were implicated in financial scandals! Don't get me wrong - I'm not going to take a position on the guy, what he does or doesn't do is irrelevant as far as I'm concerned - but I do note the attempts to put him back in his box all because of La Ley Bitcoin.
On the position El Salvador has taken in bitcoin - so it's down - big wuff. We were repeatedly told that this was going to take the country down when its a ridiculously small position that the country has taken. And no word at all about inward tax receipts from crypto-related tourism.
On daily usage we're being told that its a failure because nobody uses it. Who said that everyone was going to use it straight off the bat? That's completely and utterly ridiculous. I've been there - and I'm quite happy where it is and isn't being used. The bottom line here is - is there adoption to the point where someone can come along and utilise the digital currency as a means of payment on a day to day basis most of the time. The answer to that question is yes - and when a place get to that point, it changes everything - because at that point, the individual has choice. It enables people like me (and there are far more of those than you appreciate) to go there and use it as a currency.
It's also given major retail corporates a live pilot to work with in implementing bitcoin payments. Take McDonalds as an example. They went to the trouble of setting up lightning based payments in their locations throughout El Salvador. They now have that IP in rolling that out in other places. No doubt they were able to tap into that knowledge base in enabling BTC payments in Lugano, Switzerland - a city which is also embracing Bitcoin.
Bukele would never have even considered going down that road if it were not for the community-based project that emerged in El Zonte (Bitcoin Beach). They continue to expand that circular economy and their work has now led to the very recent development of similar community initiatives in Brazil, Honduras, Vietnam, South Africa, Guatemala and The Philippines. They're continually working on education relative to Bitcoin. In San Salvador an NGO has been founded and they're continually providing education relative to bitcoin to school groups and adults.
All of that to say - everything that's happening re. bitcoin in El Salvador is positive and continues to be a success, with the grass roots development being far more important than what government has done in my view.
We haven't seen anything yet when it comes to the big institutions. Most are holding back for complete regulatory clarity. Mostly we're still talking about niche hedge funds although there are a couple of exceptions like Fidelity. There will be more soon enough. Have we seen the worst of wall street practices applied in crypto related to crypto? Absolutely. Everything related FTX smacks of that. You'll note too that little of that activity has to do with bitcoin and everything to do with the random crap coin casino that has been bolted on. Actually you won't make that distinction because I've never seen anyone here make the distinction on the opposing side of the discussion.
None of that means that there isn't utility in bitcoin itself. It's been pointed out many times - beyond finding a venue to buy or sell the asset, an individual doesn't have to screw around with any other intermediary or get themselves would up with some complex financial product that they don't understand - or some complex tokenomics in some other project that they don't understand. Tarring everything with the one brush means that you cant see the forest for the trees.
In. Your. Opinion.
I disagree.
I agree with them - they don't understand it. No contest.
Well, kudos. Let this 'simpleton' award you a gold star - because you've actually achieved something that it seems some others can't. You've proven that you've been able to accept that you had to adjust your view on something and that your initial take was wayward.
You felt stupid because you reassessed and came to a different conclusion? I guess now I know why I was called an 'idiot' here many months ago.
I'm open to circumstances changing or my take changing or bitcoin simply failing (because it's not a foregone conclusion either way - you or I alone don't have control of that outcome and it's wayward to ever think that to be the case. We can of course make an assessment but at no point would it be correct to run with an absolute position - on bitcoin or anything else.
And there it is. In.Your.Opinion.
I may be a 'simpleton' and you a TradFi wizzard and yet that still doesn't make an absolutist position on the subject. Here's how wrong it is to talk in absolute terms ->
That's an absolute statement of yours from 2018 - which is now obsolete.
What 'social cost'? If you're referring to someone deciding to use BTC to some degree or other as a store of value and that they would have to deal with the 'social cost' of bitcoin failing, that's the individuals decision. Nobody should be making a financial decision if they're not prepared to take responsibility for that decision. And to that point, you'll notice that in TradFi oftentimes there are bailouts as the fiat money system backstops the whole show. There is no such thing in the crypto world - it's a pure capitalist view - sans bailout.
Not even reading the above. It's pure waffle. Read your posts over the past couple of years. Every positive article from crypto media you have linked and used as evidence of some sort of movement. You have portayed and dismissed every single bit of bad news as some some sort of scaremongering by people who don't understand.
You believe crypto currency is the future. Good for you. Just not sure why you have spent so much of your life over the past couple of years trying to convince others on this site. I think that's why @Duke of Marmalade refers to it as a cult. Take a break. I am sure you are super intelligent so go off and enjoy watching the rest of us livie in the dark ages....
You believe crypto currency is the future. Good for you. Just not sure why you have spent so much of your life over the past couple of years trying to convince others on this site. I think that's why @Duke of Marmalade refers to it as a cult. Take a break. I am sure you are super intelligent so go off and enjoy watching the rest of us livie in the dark ages....
You could go short on Bitcoin !? If not, why not ...
many many varied uses for many different types of crypto - I am not surprised no-one has explained it to you. Volumes and volumes of explanations required, to be an expert.
I have been involved in a transaction where crypto was exchanged as a means of payment costing tens of thousands only. Regular payment via a high-street institution would have cost about 250,000 dollars in fees.