Why is Bitcoin "digital gold" crashing right now?

[Duke of Marmalade]

So the concept is simple but its foolish to dismiss it on that basis as it's also powerful. It's so powerful as to mean that gold cant be a medium of exchange. Bitcoins strength in terms of its divisibility means that as this progresses we might move from dicussion of the price of a Bitcoin as a unit to the discussion of the unit price of a Satoshi.

Bitcoin doesn't appear to be high tech but it doesn't have to be as what it does provide is a technology of trust - and that's powerful.

You really think that is a big plus for bitcoin? And you say you are not a cultist. Sure divisibility is an essential requirement for a functioning currency but it represents no challenge at all for Fiat - why the moderate rating? If for some bizarre reason the cent is not small enough for practical purposes there would be no problem in introducing the tecate with 1 cent = 10 tecates or 100 or 1000, whatever.

 

[tecate]

And you say you are not a cultist.

You show signs of an ability to partake in an adult discussion - can you please put this inaccurate and nonsensical terminology in the Lego bucket as it has no place here!

You really think that is a big plus for bitcoin? Sure divisibility is an essential requirement for a functioning currency but it represents no challenge at all for Fiat - why the moderate rating? If for some bizarre reason the cent is not small enough for practical purposes there would be no problem in introducing the tecate with 1 cent = 10 tecates or 100 or 1000, whatever.

I think that it is an essential characteristic of a means of exchange/currency, yes. In this case, it invalidates gold completely. In the case of FIAT, sure it scores well. However, Satoshi could see that this is fixed supply currency and that there would be a need for eight places of decimal. There's no need for eight places of decimal with FIAT when they just print the stuff off like its going out of fashion.

introducing the tecate with 1 cent = 10 tecates or 100 or 1000, whatever

It's the weekend and I agree that we should introduce the 'Tecate' at this point ->

 

[Duke of Marmalade]

It really is perverse that Kelleher gives bitcoin the edge over fiat for divisibility. Does he not realise that these days fiat is every bit as digital as any crypto. But he actually points to a minor advantage for fiat that was not on his long list. I would call it "emergency fall back feature". By this I mean having a few notes and coins in your pocket, just in case there is a power cut or you want to drop a few bob in the old man's hat or the SVP box or you want to give a discrete tip to the waitress or you want to give the grandchildren something for a few sweets. Admittedly you would have to restrict your transaction to a whole number of cents in these situations.

 

[tecate]

It really is perverse that Kelleher gives bitcoin the edge over fiat for divisibility.

I don't think from a pro-FIAT point of view, it's something to get animated about. In isolation, it's a small difference between FIAT and bitcoin. For gold, it's a deal breaker for a medium of exchange use case.

But he actually points to a minor advantage for fiat that was not on his list. I would call it "emergency fall back feature". By this I mean having a few notes and coins in your pocket, just in case there is a power cut or you want to drop a few bob in the old man's hat or the SVP box or you want to give a discrete tip to the waitress. Admittedly you would have to restrict your transaction to a whole number of cents in these situations.

Bitcoin can be transacted via satellite. It can be transacted via text message also. When mesh networks become more popular, it will be even more robust still (but that's a while off). Tips can be given in Bitcoin - via an app on your phone and flashing a QR code.
If we are going to have prolonged outages of electricity beyond what a genny can provide us with, lets just say we're into bigger problems and it won't be cash or bitcoin that we will need but guns.

 

[Duke of Marmalade]

I don't think from a pro-FIAT point of view, it's something to get animated about. In isolation, it's a small difference between FIAT and bitcoin. For gold, it's a deal breaker for a medium of exchange use case.


Bitcoin can be transacted via satellite. It can be transacted via text message also. When mesh networks become more popular, it will be even more robust still (but that's a while off). Tips can be given in Bitcoin - via an app on your phone and flashing a QR code.
If we are going to have prolonged outages of electricity beyond what a genny can provide us with, lets just say we're into bigger problems and it won't be cash or bitcoin that we will need but guns.

I was just saying that fiat had a minor edge over bitcoin in being available in notes and coins. An edge (amongst others like Cognizability) that was not in the long list.

 

[Leo]

We're increasingly going toward an ever digital future Leo. Surely if those things present as sound characteristics for money, they should be included? Just because they didn't exist as characteristics back in the day shouldn't preclude their consideration.

I thought he was talking in present tense? ~99% of my current transactions are digital, bitcoin doesn't give me anything new, in fact it just reduces my options.

Ok, but in what context is this being tackled? Kelleher is right that Bitcoin can be transacted simply from one party to another (without intermediation).

I'd imagine the vast majority of the population would not consider it simple.

You cite India as an example and that's interesting as just a few weeks ago, they rolled back positively towards crypto, instructing their banks to bank crypto companies having taken a harder line before that.

Note that this is not the Indian government changing their mind, the earlier roll-back was instigated by a Supreme Court ruling the previous restrictions weren't backed by law. So now they're implementing law to enforce their position.

Well, right now, it's not cost effective to transact micro-payments. Visa/conventional means can't support that (largely due to fees).

And I can push a $0.0001 transaction through Bitcoin without fees? Regardless, you're missing the point. I meant the cost to business in selling products or billing services at $0.001. I'd be confident no person or business will ever need to transact at that level, and so touting bitcoin as being massively divisible is pushing a characteristic that offers zero value.

But in answer to your question, do I think there will be gazillions of micro-transactions in the near future? Absolutely. Year on year, gazillions of IoT devices are being rolled out. With that, they're going to be collecting valuable data. Lets say you have a digital wallet in a car for example. The car can collect data about pot holes or traffic, etc. That data on an individual basis would be worth little - but over an entire car fleet, its a lot - and the power of it is a beautiful thing. That data can be sold and the same digital wallet could be used for different things. eg. car passes through toll and the digital wallet pays toll fee automatically with the very same crypto.

People give up traffic and LA maintenance issues free at the moment, so I don't foresee anyone paying for that. But leaving the specific example aside, there are already micro reward services that pay users for visiting sites, watching ads, etc., they all manage by building the credits to a point where something of real value is built up. With bitcoin's scaling issues, it certainly won't be the crypto of choice for anything involving that magnitude of transactions.

 

[Leo]

Leo this is what Mr Kelleher says about "divisibility":

So it's handy for deflationary purposes. It's really scarce, but we built in a mechanism to get around that...

 

[Duke of Marmalade]

So it's handy for deflationary purposes. It's really scarce, but we built in a mechanism to get around that...

That is an excellent point. Scarcity does not arise at all when the real number line is a continuum. There are in fact 21 by 10 to the power of 16 Satoshis. That is an enormous number. So stop shouting about scarce supply and start talking about limited supply.

 

[tecate]

I was just saying that fiat had a minor edge over bitcoin in being available in notes and coins. An edge (amongst others like Cognizability) that was not in the long list.

It's a minor edge for sure given that if we're without electricity for extended periods, it's guns that will be needed - not cash or Bitcoin. So the well researched piece that you relied upon to build your pro-FIAT argument doesn't work for you now? I guess that's why you didn't link to it - and just cherry picked the piece that was supportive of your world view, right?

I thought he was talking in present tense?

I'm not sure what the issue is? He has included a few categories that FIAT and gold can't possibly score well with (as they have their foundations rooted in an analog time). But if you check those fundamentals, they're legitimate in terms of what would make a decent medium of exchange.

99% of my current transactions are digital

No problem Leo - then don't use it There's plenty of us on the planet that see the value in decentralised, permissionless, censorship resistant money though.

bitcoin doesn't give me anything new

You mean you don't see any value in the new features it does bring. That's a bit different. And that's ok - you don't have to use it but its there for you if you ever do want to use it.

in fact it just reduces my options.

How do you figure that one? You have the current options that you currently profess to be more than happy with. You have no interest in using Bitcoin - that's fine. How does that in any way reduce your options given that it's optional whether you use it or not?

I'd imagine the vast majority of the population would not consider it simple.

And I'd imagine if you were first introduced to a bank today - and never heard of it or how it worked, it would seem complicated. If you can install an app on your phone, I can send you Bitcoin.
When it comes to the storing of significant amounts of crypto, it does need a better UX but that will come through in due course.

Note that this is not the Indian government changing their mind, the earlier roll-back was instigated by a Supreme Court ruling the previous restrictions weren't backed by law. So now they're implementing law to enforce their position.

Good luck to them (not because I actually wish them good luck - because they'll need it if they think they can smother crypto so easily).

And I can push a $0.0001 transaction through Bitcoin without fees?

Dabbling in the rhetorical I see (given that I myself said that fees could still be an obstacle at that micro-level). Again, like I said, we'll have to see how LN fees pan out. If not, there's a crypto that's feeless that will do the job quite nicely.

I meant the cost to business in selling products or billing services at $0.001. I'd be confident no person or business will ever need to transact at that level, and so touting bitcoin as being massively divisible is pushing a characteristic that offers zero value.

In an automated machine to machine environment (IoT sensors), sure they will. If you're talking billions of sensors and repeated data points, then it's far more significant than you've considered it to be.

People give up traffic and LA maintenance issues free at the moment, so I don't foresee anyone paying for that. But leaving the specific example aside, there are already micro reward services that pay users for visiting sites, watching ads, etc., they all manage by building the credits to a point where something of real value is built up. With bitcoin's scaling issues, it certainly won't be the crypto of choice for anything involving that magnitude of transactions.

On the first part, I believe you misunderstand. Facebook, google and others we may be giving data away to - but in the not too distant future, personal data will be under our own control and it will be up to ourselves if we want to sell aspects of it. In terms of the example I gave, I'm talking about something that's completely automated. And I agree - as I mentioned from the outset - it's likely that another crypto will handle this type of stuff.

So it's handy for deflationary purposes. It's really scarce, but we built in a mechanism to get around that...

That is an excellent point. Scarcity does not arise at all when the real number line is a continuum. There are in fact 21 by 10 to the power of 16 Satoshis. That is an enormous number. So stop shouting about scarce supply and start talking about limited supply.

Honestly, if you can't figure out the difference between scarcity/fixed supply and divisibility, you really have my sympathies!

 

[Duke of Marmalade]

Honestly, if you can't figure out the difference between scarcity/fixed supply and divisibility, you really have my sympathies!

Don’t be so prickly. This is not a damning assault on bitcoin but Leo has pointed to what will surely be a case study in market psychology.
The only unit of physical significance is the smallest one, anything else is just packaging. This is especially so if the currency has no intrinsic link or previous history. Satoshi decided that his currency would have 2,100 Trillion units, now called satoshis. Now fiat usually bundles its smallest unit into 100s. Satoshi could even have decided to package the whole lot as 1 bitcoin, wouldn’t make any difference of substance. He chose instead to package them in bundles of 100 million. Certainly by fiat standards it looks a bit OTT but as I said not a fatal condemnation of the construct.

Kelleher talks in terms of 21 million bitcoins being a very small number but by the miracle of the blockchain technology it is capable of being split into 100 million pieces each. This is junior infants stuff.

 

[Duke of Marmalade]

It's a minor edge for sure given that if we're without electricity for extended periods, it's guns that will be needed - not cash or Bitcoin.

I mentioned several everyday uses for notes and coin including the odd electricity outage. You have twisted this into an Armageddon point which I presume you think is a slam dunk riposte but anybody watching will surely find it bemusing.
Whist we are on Armageddon, you are fond of reminding us of the possibility of the dollar or euro doing a Zimbabwe/Venezuala/Lebanon. Do you really think that in that scenario you will be able to smugly lie in your bed at night with your bitcoin wallet under your pillow?

 

[WolfeTone]

Now fiat usually bundles its smallest unit into 100s.

Yes, but what does fiat bundle its largest units into? Well, currently its trillions, and tens of them too.
So yes, satoshi could have limited bitcoin to one single unit, which would be priced at $160bn today. And for small punters like myself, the term 'satoshis' would be more prominent in the general lexicon discussion of bitcoin, rather than 'bitcoin' itself - eg 'I bought 10,000 satoshi today', rather than '...0.00010000 bitcoin'.
The satoshi lexicon hasn't really emerged yet and I do wonder if bitcoin had been set at one single unit, now priced at $160bn, would bitcoin actually draw more traction and momentum from the mass population by virtue of such a colossal price? Bitcoin price is $160bn is certainly more head turning headline than $9,000.

Instead its a meagre $9000, which although no small change for most people, does not really catch the imagination of the mass population who, as has been pointed out, are broadly indifferent to bitcoin.
However, is a long-game being played out here? The problems with the bitcoin network have been highlighted and the innovations to tackle those problems, we are told, are under development. Confidence in finding solutions is reflective in its price, in my opinion. If solutions do not emerge, then over time, bitcoin will return to its ultimate destination. If solutions do emerge, then the scope within the bitcoin unit of measurement to grow exponentially throughout the mass population is massive.

 

[Duke of Marmalade]

Yes, but what does fiat bundle its largest units into? Well, currently its trillions, and tens of them too.
So yes, satoshi could have limited bitcoin to one single unit, which would be priced at $160bn today. And for small punters like myself, the term 'satoshis' would be more prominent in the general lexicon discussion of bitcoin, rather than 'bitcoin' itself - eg 'I bought 10,000 satoshi today', rather than '...0.00010000 bitcoin'.
The satoshi lexicon hasn't really emerged yet and I do wonder if bitcoin had been set at one single unit, now priced at $160bn, would bitcoin actually draw more traction and momentum from the mass population by virtue of such a colossal price? Bitcoin price is $160bn is certainly more head turning headline than $9,000.

Instead its a meagre $9000, which although no small change for most people, does not really catch the imagination of the mass population who, as has been pointed out, are broadly indifferent to bitcoin.
However, is a long-game being played out here? The problems with the bitcoin network have been highlighted and the innovations to tackle those problems, we are told, are under development. Confidence in finding solutions is reflective in its price, in my opinion. If solutions do not emerge, then over time, bitcoin will return to its ultimate destination. If solutions do emerge, then the scope within the bitcoin unit of measurement to grow exponentially throughout the mass population is massive.

Well at least you see Leo's point. The whole bitcoin thing is a fascinating insight into human psychology. How significant is the arbitrary choice of bitcoin's bundle of primary units. 100 million was chosen. Would we have had a different price trajectory if it it had been 100, 10000, 1m? It all goes back to one fundamental. Bitcoin is not cognizable i.e. there is no clear look through to its value. I wonder what Satoshi had in mind. What was his/her target $ price for bitcoin? I doubt it was $9,000.

 

[tecate]

Kelleher talks in terms of 21 million bitcoins being a very small number but by the miracle of the blockchain technology it is capable of being split into 100 million pieces each. This is junior infants stuff.

You're now trying to suggest that it isn't scarce on the basis of divisibility. If that was the case, why do both scarcity and divisibility show up as fundamental characteristics of money - according to the Federal Reserve and others?
Divisibility does not undo scarcity.

I mentioned several everyday uses for notes and coin including the odd electricity outage. You have twisted this into an Armageddon point which I presume you think is a slam dunk riposte but anybody watching will surely find it bemusing.

The power outage scenario was the only one you mentioned where cash has an advantage. What else did you mention in this context?

but anybody watching will surely find it bemusing.

What sort of childish nonsense is this?

you are fond of reminding us of the possibility of the dollar or euro doing a Zimbabwe/Venezuala/Lebanon. Do you really think that in that scenario you will be able to smugly lie in your bed at night with your bitcoin wallet under your pillow?

Are you talking in terms of security? If so, then absolutely. So, you have cash under your pillow - someone can come in and wrestle it out of your hands. In contrast, you could have a Bitcoin wallet with the flexibility to have it secured by as many as 15 key holders and you can configure it as to whether 1 or 15 (or any number in between) keys are needed to unlock that wallet. Those 15 keyholders could be anywhere geographically. Someone can come in and suspect you have Bitcoin - 'persuade' the private key out of you - but the wallet will be looking for another X number of private keys - which that individual doesn't have.

It all goes back to one fundamental. Bitcoin is not cognisable

You're talking about the very last step. I'm sure there are many FIAT currencies around the world that are not cognizable to you because you don't use them as a medium of exchange or unit of account. Cognisability is a function of 'unit of account'. An incumbent will always have cognisability.

What was his/her target $ price for bitcoin? I doubt it was $9,000.

I doubt it too - why would there be 8 places of decimal otherwise.

 

[WolfeTone]

The whole bitcoin thing is a fascinating insight into human psychology.

It certainly is.

Would we have had a different price trajectory if it it had been 100, 10000, 1m?

I would suggest yes most definitely, but will refrain from even guessing what that trajectory would have been.

Bitcoin is not cognizable i.e. there is no clear look through to its value.

The price/value argument of what is value, how to price etc can be trashed out infinitely, so rather than re-hash it all, I will set out my reasoning for value and applying a price to that value.

From my own perspective I use my record collection analogy. I place a high value on my record collection and price that value at €10K+ using a formula containing the amount of time and money I have spent on collecting, the overall condition of the records, mixed with huge dollop of nostalgia.
I do this full in the knowledge that a second hand record trader would probably part no more than €250, at best, for the entire collection - he using a basic formula of time, effort and potential profit.
My wife will pay someone €50 to take the whole lot away - using a simple formula of the extra space in the attic having greater utility than being occupied with my records.

That's three different valuations, using three different formulas, resulting in three different prices, for the exact same thing.
If the only participants in the market for my record collection were me, the second hand retailer and my wife, the market wouldn't function.
But if millions of people were engaged, record collectors, traders etc, a market could emerge with each buyer/seller applying a price based on their own formula to value merchandise. An overall market emerges with buyers and sellers at any given price and prospective buyers and sellers gauging whether the market price is too high or too low.

So with that, do I see value in bitcoin? Yes, I do. For the primary reason that I think the concept of being able to store money outside of the prevailing monetary system, not being manipulated by central banks or governments, is a brilliant, genius idea.
Not because I think bitcoin will take over the world, not because im anti-central bank, anti-government, but because I know for a fact, that those said institutions have a history of manipulating their own monetary and financial systems (human nature). It is my view, that such manipulation and fraud has real potential (increasingly so) to fundamentally undermine the confidence and trustworthiness of the system.
Bitcoin, to me, has a greater prospect as acting as a bulwark against financial fraud and manipulation in the central bank monetary system rather than the "its great for criminals" tabloid stories we hear about.
I also see some value in it being used, potentially, as a medium of exchange (in a widely and generally accepted way), but less and less so.

So money stored outside monetary system + manipulation inside of monetary system (human nature) + potential use as a generally accepted medium of exchange = value.

The price I place on that, if bitcoin realises its full potential is massive. Far greater than where we are today.
That said, it is of course speculative. If the solutions for the network fail to emerge, if another network eclipses it, if the internet gets switched off! etc...then it could go back to zero.
But as it stands it does have value, and I speculate that the price currently applied to that value is cheap.

 

[Duke of Marmalade]

You're now trying to suggest that it isn't scarce on the basis of divisibility. If that was the case, why do both scarcity and divisibility show up as fundamental characteristics of money - according to the Federal Reserve and others?
Divisibility does not undo scarcity.

If bitcoin was 100 satoshis like conventional currencies there would be 21 Trillion of them. I doubt it would be marketed as "scarce" though. If bitcoin was 2,100 Trillion satoshis it would be as scarce as the Taj Mahal. Yet nothing whatsosever would be different, other than simply the name calling. I am not trashing bitcoin on this count, but I am questioning whether scarce is a suitable description. Ironically it does have an edge over Gold in this space - we know its Limit. Gold is scarce but we do not know its limit. Somehow scarce sounds more sexy than limited.

The power outage scenario was the only one you mentioned where cash has an advantage. What else did you mention in this context?

By this I mean having a few notes and coins in your pocket, just in case there is a power cut or you want to drop a few bob in the old man's hat or the SVP box or you want to give a discrete tip to the waitress or you want to give the grandchildren something for a few sweets.

I said it was a minor point but it was conspicuous by its absence from a long list.

Are you talking in terms of security? If so, then absolutely. So, you have cash under your pillow - someone can come in and wrestle it out of your hands. In contrast, you could have a Bitcoin wallet with the flexibility to have it secured by as many as 15 key holders and you can configure it as to whether 1 or 15 (or any number in between) keys are needed to unlock that wallet.

If you think your bitcoin wallet will be of value "with the world in a grave" (Barry Maguire: Eve of Destruction) that does go some way to explain your passion for it.

 

[Duke of Marmalade]

It certainly is.



I would suggest yes most definitely, but will refrain from even guessing what that trajectory would have been.



The price/value argument of what is value, how to price etc can be trashed out infinitely, so rather than re-hash it all, I will set out my reasoning for value and applying a price to that value.

From my own perspective I use my record collection analogy. I place a high value on my record collection and price that value at €10K+ using a formula containing the amount of time and money I have spent on collecting, the overall condition of the records, mixed with huge dollop of nostalgia.
I do this full in the knowledge that a second hand record trader would probably part no more than €250, at best, for the entire collection - he using a basic formula of time, effort and potential profit.
My wife will pay someone €50 to take the whole lot away - using a simple formula of the extra space in the attic having greater utility than being occupied with my records.

That's three different valuations, using three different formulas, resulting in three different prices, for the exact same thing.
If the only participants in the market for my record collection were me, the second hand retailer and my wife, the market wouldn't function.
But if millions of people were engaged, record collectors, traders etc, a market could emerge with each buyer/seller applying a price based on their own formula to value merchandise. An overall market emerges with buyers and sellers at any given price and prospective buyers and sellers gauging whether the market price is too high or too low.

So with that, do I see value in bitcoin? Yes, I do. For the primary reason that I think the concept of being able to store money outside of the prevailing monetary system, not being manipulated by central banks or governments, is a brilliant, genius idea.
Not because I think bitcoin will take over the world, not because im anti-central bank, anti-government, but because I know for a fact, that those said institutions have a history of manipulating their own monetary and financial systems (human nature). It is my view, that such manipulation and fraud has real potential (increasingly so) to fundamentally undermine the confidence and trustworthiness of the system.
Bitcoin, to me, has a greater prospect as acting as a bulwark against financial fraud and manipulation in the central bank monetary system rather than the "its great for criminals" tabloid stories we hear about.
I also see some value in it being used, potentially, as a medium of exchange (in a widely and generally accepted way), but less and less so.

So money stored outside monetary system + manipulation inside of monetary system (human nature) + potential use as a generally accepted medium of exchange = value.

The price I place on that, if bitcoin realises its full potential is massive. Far greater than where we are today.
That said, it is of course speculative. If the solutions for the network fail to emerge, if another network eclipses it, if the internet gets switched off! etc...then it could go back to zero.
But as it stands it does have value, and I speculate that the price currently applied to that value is cheap.

Wolfie I am always a tad nervous in engaging with you given your penchant for popping up in various aliases.
That was an amusing allegory about your record collection and I see the point you are making.
More pertinently you do not seem to agree with the following:

Bitcoin's utility as a store of value is dependent on its utility as a medium of exchange. We base this in turn on the assumption that for something to be used as a store of value it needs to have some intrinsic value, and if Bitcoin does not achieve success as a medium of exchange, it will have no practical utility and thus no intrinsic value and won't be appealing as a store of value.

In case you haven't been following the story so far. Kelleher is a big fan of bitcoin, albeit somewhat biased as evidenced by his long list of requirements for a currency which was heavily tilted in favour of the crypto.
I agree 100% with the above assertion by Kelleher. I am not sure where tecate stands on it as he will not answer the point "out of context".

 

[tecate]

If bitcoin was 100 satoshis like conventional currencies there would be 21 Trillion of them. I doubt it would be marketed as "scarce" though. If bitcoin was 2,100 Trillion satoshis it would be as scarce as the Taj Mahal. Yet nothing whatsosever would be different, other than simply the name calling. I am not trashing bitcoin on this count, but I am questioning whether scarce is a suitable description. Ironically it does have an edge over Gold in this space - we know its Limit. Gold is scarce but we do not know its limit. Somehow scarce sounds more sexy than limited.

There's no end to the absurdity. I've never seen such a claim anywhere else before - more media interview potential for AAM nocoiner-naysayers.
I'll say it again - divisibility does not undo scarcity.

If you think your bitcoin wallet will be of value "with the world in a grave" (Barry Maguire: Eve of Destruction) that does go some way to explain your passion for it.

What are you talking about? If you have hard money in a country who's currency has just gone into hyperinflation, are you trying to tell us all that you would prefer to be in that hyper-inflated currency instead? Time to go back to school, your Dukeness.

And by the way, I didn't say any such thing about the Euro or the Dollar doing a Venezuela. What I said was that ALL FIAT currencies can be mismanaged. Bitcoin isn't politically influenced by the whims of a wanna-be despot. Another example of that interference here.

There are various levels of mismanagement. As for the Euro, it may cease to exist - many commentators have been saying that in recent months (none of them with anything to do with crypto). IF that was to happen - on the very day it happens, whatever wealth you have in your irish bank accounts will be devalued immediately. That wealth will take a major haircut as the Punt Nua will devalue immediately.

 

[tecate]

In case you haven't been following the story so far. Kelleher is a big fan of bitcoin, albeit somewhat biased as evidenced by his long list of requirements for a currency which was heavily tilted in favour of the crypto.

Now he's biased even though you were the one that introduced his commentary to this discussion? Priceless. As I said before, It was no accident that you didn't link to his article back then and you cherry picked a specific tract of text - which, out of context and in isolation supports your world view - not the article in its entirety.

I agree 100% with the above assertion by Kelleher. I am not sure where tecate stands on it as he will not answer the point "out of context".

The article confirmed that gold is a store of value despite not being (and not having the ability to be) a medium of exchange. Bitcoin goes one further insofar as it can be used as a medium of exchange (and we will see ongoing work on UX to make it easier to use in that context as we go forward from here). On that basis, it's clearly not precluded from acting as a store of value in its own right or digital gold.

 

[Duke of Marmalade]

There's no end to the absurdity.
I'll say it again - divisibility does not undo scarcity.

It was Kelleher who made a big deal of divisibility, as you noted I kept the nonsensical bits of his ramblings away from AAM.
Question Yes or No? Are satoshis scarce? Clue: there will be 2,100 trillion of them. If you say they aren't scarce then as a supplementary where would the decimal point need to have been drawn to make bitcoin earn the sobriquet of "scarce"?

What are you talking about? If you have hard money in a country who's currency has just gone into hyperinflation, are you trying to tell us all that you would prefer to be in that hyper-inflated currency instead?

It was you who brought up the Armageddon motif:

It's a minor edge for sure given that if we're without electricity for extended periods, it's guns that will be needed - not cash or Bitcoin.

You appear to have changed your mind, you will be secure with your bitcoin wallet when the nukes start being thrown around. Or maybe I misunderstood your metaphor "it's guns that will be needed".

There are various levels of mismanagement. As for the Euro, it may cease to exist - many commentators have been saying that in recent months (none of them with anything to do with crypto). IF that was to happen - on the very day it happens, whatever wealth you have in your irish bank accounts will be devalued immediately. That wealth will take a major haircut as the Punt Nua will devalue immediately.

You may be right, though David McWilliams believes that the punt would soar in such a scenario.

The article confirmed that gold is a store of value despite not being (and not having the ability to be) a medium of exchange. Bitcoin goes one further insofar as it can be used as a medium of exchange (and we will see ongoing work on UX to make it easier to use in that context as we go forward from here). On that basis, it's clearly not precluded from acting as a store of value in its own right or digital gold.

You're still doing a bit of a politician there. But I think you are saying that you believe bitcoin can be a long term store of value without necessarily making the grade as a medium of exchange. If this is so, you totally reject Kelleher's view. But correct me if I have misinterpreted you.