Who knows?we might! If it becomes widely usable like a traditional currency then why not. Its a big "if".
What is money. Why Bitcoin is, and is not.
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Duke of Marmalade
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Exactly, it's a big "if". According to John Kelleher (Investopedia) today's price would require bitcoin to have achieved a currency status on a par with, say, sterling. There would need to be 10s of millions of consumers who "think" bitcoin, who expect to be paid in bitcoin, who expect to see prices in the local supermarket marked in bitcoin, who immediately change any other currency into bitcoin as soon as they get it. Today's price is a massive gamble on that "if".
Kelleher makes no such claim.
"This article will not make a case for what the market penetration will be, but for the sake of the evaluation, we'll pick a rather arbitrary value of 15%, both for bitcoin as a currency and bitcoin as a store of value. You are encouraged to form your own opinion for this projection and adjust the valuation accordingly."
Ah now, cash and bearer instruments are different things, bearer instruments convey rights to an underlying property, cash is cash. But neither cash nor bearer instruments, as you suggested, convey any information about their owner.
And what does that say about my identity?
Duke of Marmalade
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John himself speculates that btc will achieve 15% of world currency penetration, thus justifying an ultimate price of $500k. Now sterling takes up 4% of world forex, so using that as a proxy I estimate by John's criterion that an ultimate penetration of btc on a par with sterling would justify a price of $500k x 4/15 = $133k. So I would say that a current price of $47k is a bet that ultimately btc will be a more important currency than sterling. My guess is that the @tecate 's of this world have no problem with such a prediction.
Indeed.
And he also encourages you.... to form your own opinion for this projection and adjust the valuation accordingly.
My own estimation is that a sustained price tag of north of $100,000+ before bitcoin even starts to become accepted as a medium of exchange of any significant level.
Duke of Marmalade
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It's a bit cart before the horse. A price over $100k can only be justified by a currency penetration equal to sterling, according to John. It can only become a currency if it achieves a price above $100k according to @WolfeTone. That makes today's price of $47k extremely speculative indeed for it says that it needs to more than double from here to justify its existence. Even I would not make put such a high requirement on the crypto.
If the volatility came down to levels such that BTC/$ was about as volatile as £/$ then it would have at least established itself as being a candidate for being a currency, no matter what the price level that secured that level of stability. At these volatilities it is hopelessly unsatisfactory as a tranactional currency.
Yes, and between me and Kelleher, both of our views are speculation. Open to be proven right, or proven wrong.
Except it is Kelleher who is speculating that bitcoin must become a medium of exchange to have any utility. He speculates at what point that would/should occur, but is clear in his commentary that it is a simplified estimation and encourages others to make their own projections for vsluations.
Your frequent reliance on Kellehers speculative views indicate that you place, somewhat ironically, a great store of value in them.
For myself, I don't dismiss his views but I don't make the claim that bitcoin must become a medium of exchange to have utility.
As invited to do by Kelleher, I make my own projections.
That is, regardless of what governments and central banks tell us, or instruct, or advise, people will act in their own economic interest in the long-run. That interest, typically, should operate within the parameters of a sound monetary system, backed by over-arching authorities providing trust and confidence in the system.
It is a central argument of those who buy bitcoin that we do not operate within a sound monetary system. That confidence is being ebbed away by virtue of a system that does not operate within defined parameters of a sound monetary system - despite what our leaders tell us.
To get a tiny sense of the distortions manifesting in our monetary system you only have to look at the headlines on the RTÉ business website today.
UK economy retracts 9.9%
House prices increase 3.5%
Are banks about to start charging us for our savings
Office space take-up down 49%
What is going on? This is just one snippet of headlines on one day, that signal (to me at least) clear distortions manifesting themselves in our monetary system.
Eventually, these distortions will feed into a widespread realisation that the monetary system is not operating within defined parameters of a sound money system, that realisation will induce people to utilise other means to sustain the value of their own wealth.
There is an obvious trend in motion now, at institutional level, to sustain the value of their own wealth by others means other than within the parameters of the global central bank monetary system.
I can't say when, or if, bitcoin will become a medium of exchange, but I suspect it will. The higher the price, sustained, the sooner that realisation will emerge.
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This thread sets out to suggest that bitcoin can't be money due to its volatility.
And yet the world's oldest currency is just as volatile.
Other commentary has focused on the 'terrible' losses suffered by those who have purchased bitcoin, when it was bought at up to $20,000 in late 2017 - early 2018. And again, in the more recent hype cycle when it ran up to $67,000.
I don't see anyone screaming about Snapchat though. Why is that?
And yet the world's oldest currency is just as volatile.
Other commentary has focused on the 'terrible' losses suffered by those who have purchased bitcoin, when it was bought at up to $20,000 in late 2017 - early 2018. And again, in the more recent hype cycle when it ran up to $67,000.
I don't see anyone screaming about Snapchat though. Why is that?
Brendan Burgess
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Brendan Burgess
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@tecate
As regards sterling
(Bloomberg) -- The pound sterling -- regarded as the world’s oldest currency still in use since its inception more than a thousand years ago -- is almost as volatile as new-comer Bitcoin as of late. Here’s a look at the 30-day volatility for both:
30 day volatility? Very short-term and very unusual.
Your graph tells it all
Over the last 5 years, sterling has been relatively stable.
Brendan
As regards sterling
(Bloomberg) -- The pound sterling -- regarded as the world’s oldest currency still in use since its inception more than a thousand years ago -- is almost as volatile as new-comer Bitcoin as of late. Here’s a look at the 30-day volatility for both:
30 day volatility? Very short-term and very unusual.
Your graph tells it all
Over the last 5 years, sterling has been relatively stable.
Brendan
The world's oldest currency as administered by the Bank of England is regarded as money - although evidently it's just as volatile as Bitcoin. Who knew? On your follow up post, so we can use the GBP as money today even though it's as volatile as Bitcoin today - because it's not been so volatile other times? Let's accommodate the pound when its as volatile as Bitcoin but lets not even countenance the mere mention of Bitcoin being money. Yet bitcoin is destined to become less and less volatile - a trend it's already established.
The follow up point I made is separate - and relates to commentary made by folks here lamenting the poor craturs that bought the Bitcoin tops. I've been searching through the board and can't find any outrage when it comes to Snapchat (the most recent example - there are countless others). That's rather odd don't you think?
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Brendan Burgess
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Hi tecate
It's not as volatile as Bitcoin. Look at the graph - your own graph. How can you compare the two? If Bitcoin has been unusually steady for a few days while sterling has been unusually volatile - that means nothing.
What is worrying me is that when you make completely specious arguments like this, you damage your credibility.
Brendan
Brendan Burgess
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Not remotely odd at all. There are repeated advices on this website everywhere else to buy a diversified portfolio of shares and to expect some of them to go to zero. So there should be no outrage when it happens.
Brendan
We are both talking about the performance of GBP in recent weeks set against BTC in recent weeks. Don't try and suggest otherwise.
The point is that it's acceptable to you as a currency in these weeks despite that volatility. Your claim is that 'it means nothing'. What it means is that it's sub-optimal for a currency to be volatile but it in no way precludes it from being money. All the while bearing in mind that the GBP is a top tier fiat currency - there's a whole host of others that are much further up the charts when it comes to volatility.
I disagree. What would be damaging to my credibility in this discussion would be for me to take an absolutist position. i.e .If i was to say that in the case of two outcomes (bitcoin continues to succeed vs. bitcoin dies), I decide that only one of those two outcomes can happen. Even if I think that one of them is highly unlikely, to declare that it can't happen would be a credibility buster.
Proving my point - double standards.
We're discussing two separate points but there's a common theme running through both of them. i.e. a conventional stock is volatile - but of course it is - that's totally acceptable. Bitcoin is volatile, would someone please think of the children.
A top tier fiat currency is volatile - and that's perfectly fine, i'm still using it as money. Bitcoin is volatile - well it can't possibly be used as money.
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