• TootSweet@lemmy.world
      link
      fedilink
      English
      arrow-up
      10
      arrow-down
      3
      ·
      11 months ago

      Do you see Bitcoin more as a currency (like, something that will revolutionize how you pay for groceries) or as a security (as in “hodl”?)

      If as a currency, how do you foresee it overcoming its scalability problems? If as a security, how do you think people will continue to have faith in it such that its price won’t go in the next few years to (roughly) zero?

      • chicken@lemmy.dbzer0.com
        link
        fedilink
        English
        arrow-up
        4
        arrow-down
        1
        ·
        11 months ago

        “Security” is kind of a loaded term, implying that you’re relying on the efforts of a company to make the value go up, “Digital asset” is probably more accurate. IMO the “store of wealth” value proposition does make some sense, so long as Bitcoin retains the #1 spot in terms of name recognition. It’s like gold, it doesn’t have to be very useful in itself, it just has to be an effective and popular way to hoard wealth, and it has a lot of useful properties for that despite its flaws.

        • Flying Squid@lemmy.world
          link
          fedilink
          English
          arrow-up
          2
          arrow-down
          1
          ·
          11 months ago

          it just has to be an effective and popular way to hoard wealth

          Which is the real problem with Bitcoin and all other crypto. It props up the capitalist system ruining the planet.

          • chicken@lemmy.dbzer0.com
            link
            fedilink
            English
            arrow-up
            1
            ·
            11 months ago

            I think it’s a little more nuanced, but that is the biggest concern I personally have about crypto; once it engulfs more of the financial system it could potentially make it harder to use redistribution to resolve the problems of wealth inequality, by being somewhat beyond the reach and control of the state. That said, our system of debt based fiat currency is itself an engine driving wealth inequality and the worst abuses of capitalism. Just about every dollar in existence is owed by someone somewhere back to the federal reserve, and they and everyone they have employed with their borrowed capital is obligated to claw it back and more by any means. Monetary policy is often explicitly intended to do things like suppress wages. Cryptocurrency poses a clear threat to the dollar, which could possibly do more good than harm, but I’m on the fence about it in that respect.

        • Aceticon@lemmy.world
          link
          fedilink
          English
          arrow-up
          1
          ·
          11 months ago

          In other words, after you average out short term volatility, bitcoin’s price reflects quite directly its brand value and nothing else.

          • chicken@lemmy.dbzer0.com
            link
            fedilink
            English
            arrow-up
            2
            ·
            11 months ago

            If we’re talking about its price relative to other cryptocurrencies I would say mostly yes. Its price relative to other wealth assets also reflects the utility for that purpose cryptocurrencies generally have. Like, a lot more liquid than real estate, a lot easier to store, confirm authenticity, and transfer internationally than gold, easier to hide and smuggle than stocks, etc.

            • Aceticon@lemmy.world
              link
              fedilink
              English
              arrow-up
              1
              ·
              edit-2
              11 months ago

              Well, I would say the utility value of those qualities is well offset by its problems, such as way less market sized than pretty much every main asset class (it’s only more liquid than realestate for fast in-and-out trading of smaller values, but less liquid than even realestate for large trades - because large trades that would barelly move the realestate market can massivelly move the crypto market - or even things with much smaller market sizes than realestate, such as most individual corporate stocks and the latter are actually faster to trade than Bitcoin because the stock exchange systems are way faster ) as well as its ridiculous gamma - i.e. volatily - (worse than stocks and almost at the level of derivatives such as Futures) and hence horrible risk profile for holding wealth (but wonderful for day-trading) and any professional trader will take that price risk into account when calculating the value of such an investment (and in my experience in the Industry and in derivative pricing, stuff with high gamma needs to yield massive returns to be worth the risk of holding over longer than a few days unless you can find something else with a negative price movement correlation to offset that risk)

              In summary, as a Financial Asset for holding wealth, its only “reliable” value is its price’s positive correlation to brand recognition, though it’s a wonderful asset for speculative trading thanks to that massive volatility and all the wonderfull possibilities to make money from the movement itself on both the long and the short side (the people I know who reliably make money from crypto currencies without actually setting up crypto scams, do it exactly via speculative trading of it in short time frames).

              • chicken@lemmy.dbzer0.com
                link
                fedilink
                English
                arrow-up
                1
                ·
                11 months ago

                I think it is reasonable to expect those two issues (volatility, market depth) to resolve themselves over time as crypto becomes more established. The trend has already been consistently in that direction. The only thing stopping deep pocketed market makers from mostly resolving the latter right now is the current regulatory hostility.

      • Gigan@lemmy.world
        link
        fedilink
        English
        arrow-up
        8
        arrow-down
        6
        ·
        11 months ago

        I treat it like a security for now. I’d like to use it as a currency at some point in the future after it has more widespread adoption. I see it kind of like the internet in the late 80’s/early 90’s right now.

        I’m not an expert on the technical hurdles, but I think the lightning network can resolve most scalability problems.

        I can’t speak for everyone, but I have faith it won’t go to zero because I think it solves a real problem and that people find it useful. As a crypto it is unique because it has first mover advantage and is completely decentralized. And the longer it’s around, the less likely it is to go to zero.

          • Gigan@lemmy.world
            link
            fedilink
            English
            arrow-up
            4
            arrow-down
            4
            ·
            11 months ago

            It’s secure and it’s decentralized. No other currency offers both. If you don’t mind trusting banks and governments to manage the money system its not a big deal. But when they fuck it up, it’s the average person that suffers. Taking that power away from them is good for humanity in my opinion.

            • Flying Squid@lemmy.world
              link
              fedilink
              English
              arrow-up
              2
              arrow-down
              1
              ·
              11 months ago

              Now let’s talk about how good for humanity its carbon footprint is.

              Bitcoin—the world’s oldest and most popular form of cryptocurrency, with a total market value that topped $1.3 trillion—now eats up half a percentage point of all the electricity consumed in the world. That puts it on par with the usage of the entire country of Sweden. In fact, Google could power all of its global operations on that amount of energy, seven times over. In comparison with more traditional online banking, a single bitcoin has the same carbon footprint as 330,000 credit card transactions.

              https://www.nrdc.org/stories/crypto-has-climate-problem

              Note, that’s from February of 2022. The problem has only grown since then.

            • Honytawk@lemmy.zip
              link
              fedilink
              English
              arrow-up
              3
              arrow-down
              3
              ·
              edit-2
              11 months ago

              It isn’t secure: web3isgoingreat.com

              And decentralisation is not something you want from a currency. All money used to be decentralised. Now we are encountering the same issues with crypto as we have had in the past with real money.

              It is basically reinventing the wheel while claiming wood is the better material for the spokes.

      • GortexGary@lemmy.world
        link
        fedilink
        English
        arrow-up
        1
        ·
        11 months ago

        I doubt zero will happen ever at this point. Too many businesses are holding it as a store of value for that to happen.

    • 768@sh.itjust.works
      link
      fedilink
      English
      arrow-up
      2
      arrow-down
      1
      ·
      11 months ago

      Don’t spread F-U-D here. You’re lowering the value of my humoristic investment.