[swalsh]

I've always been a negative detractor of bitcoin. But then I realized the problem was it was marketed wrong. As a currency, it's a nightmare of a creation. But as a store of value, it's actually pretty good. As long as you don't buy in at one of the speculative bubbles (which admittedly is when the majority of people get in), it's been pretty good at more or less maintaining its value.

As a non-physical thing, it's a good place to go when you're not sure about where to put your money. That used to be the role of the dollar, but this is a good alternative that has cheaper forex fees.

I think the long-term value of bitcoin will not be buying groceries, but storing money while you wait for your the storm your grocery stores currency is in to subside. Probably not relevant to Americans right now, but I'm sure some people in Latin America can see the value.

[geezerjay]

> I've always been a negative detractor of bitcoin. But then I realized the problem was it was marketed wrong. As a currency, it's a nightmare of a creation. But as a store of value, it's actually pretty good.

This claim is absurd. Bitcoin is patently bad as a store of value, and that's perhaps bitcoin's worse and and most ill-suited applications. Even ignoring the speculative pressures and value manioulation being conducted, just look at how much bitcoin's market value has been fluctuating. Even yesterday it suffered a 10% drop for no reason at all. Who in their right mind believes it's a good idea to store value in a highly volatile service subjected to such speculative pressures?

Nowadays bitcoin sounds a whole lot like a pump-and-dump scheme, where shills come out of the woodwork praising bitcoin's magic and supernatural properties to fool unsuspecting fools to keep pumping money into the fraud.

[cwkoss]

I think you're right.

I think a lot of people hear "Digital Currency" and think 'something like Apple Pay', when Bitcoin's competition is closer to ACH/wire transfers.

It's not a tech that everyone needs to use, and most people will pay an expert to use it for them. But if successful, could be a valuable medium for receiving payments from low-trust entities.

For example, if a stock exchange accepted Bitcoin for funding accounts, you could get your account up, funded and ready to trade in less than an hour. Most stock exchanges now take several days for funds to clear.

[amenghra]

The reason things take days to clear is not because the underlying money moving rails are slow.

If/when your stock exchange starts accepting bitcoins, they may still continue to take days to clear things.

[cwkoss]

For what reason do you think a stock exchange would want to add artificial delay to Bitcoin deposits?

I could see holding a portion as 'pending' until many confirmations, or perhaps until the Bitcoin can be liquidated on the market, but both of those seem like they could still resolve an order of magnitude faster than the 'competition'.

[amenghra]

The very same reasons they have delays right now. Institutions are able to move money pretty quickly and cheaply between themselves.

The reason you don’t get that as an end user is because of compliance, fraud, etc.

[cwkoss]

I'd argue that Bitcoin would eliminate the fraud aspect (users can not 'fake' deposits), but compliance could certainly remain as an issue.

[amenghra]

In some cases, the financial institutions could be slowing things down so they can segment the market and have paid versions of similar but quicker services.

Could be an interesting aspect to look into?

[collinmanderson]

They might want to check that your wallet isn't on a blacklist.

[knownothing]

> As long as you don't buy in at one of the speculative bubbles

I'm not so sure about that. You could have bought BTC anytime before the past week or so and it would have appreciated significantly, regardless of whether you bought it in a peak or trough. It's just a question of magnitude. E.g. if you bought 1 BTC at the lowest or highest price in 2015 you would still have outrageous returns on it today.

This is not to say it will continue being the case going forward but it's crazy to look back at.

[krrrh]

Let’s see how everyone feels after the next correction. The headlines today seem to change every time I load google news. Up 10%, down 20%. There’s no way to know where it will go from here.

[heurist]

I had bought about $50 worth of BTC a year ago and it's now worth $800. Did the bitcoin economy grow that much in the last year? I've heard of increasing adoption by banks and governments but I don't know to what extent they're investing. I don't follow it closely and at this valuation, I have no idea whether it's a good investment or not. Should I sell it now before the inevitable crash? Should I buy more? I don't trust myself to understand this kind of speculation yet.

[ChrisRazzzz]

Ask yourself first, why did the value climb 16x? If you cant answer that then I caution purchasing more. I would also spend some time understanding what "investing" is vs what speculating\gambling is.

This is gambling.

[Frogolocalypse]

> Ask yourself first, why did the value climb 16x?

Oh I can do that. I expect it to be 100x or more greater than what it is today. The reason why it is 16 as opposed to 8 or 32 is simply the speed of the uptake. It is going up in value because it is in the process of deflating the fixed-asset debt bubble. The only real question is, how big is that bubble.

> I would also spend some time understanding what "investing"

Investing is understanding what the value proposition is, and investing accordingly. You don't, and that's fine. Don't assume that other people have your understanding of the asset class in question though.

The question you should be asking is, why do you think it's important when other people invest in things that you don't understand.

[pryelluw]

Since you are clearly very well informed (no sarcasm intended), do you mind helping me with something Ive been struggling with?

In your opinion, what is the intrinsic value of Bitcoin?

[CodingGuy]

https://trends.google.com/trends/explore?q=bitcoin

This is the reason why the price is exploding.

[24gttghh]

I think this one is a bit more telling:

https://trends.google.com/trends/explore?date=all&geo=NG&q=b...

(it's for Nigeria)

And the global map for since 2004:

https://trends.google.com/trends/explore?date=all&q=bitcoin

With the search term being most popular in Nigeria.

[heurist]

That only indicates demand for botcoin, not the reason for demand. Though emerging markets adopting it might explain the growth. It doesn't help assess bitcoin's value except to indicate it might have additional stability as a currency in some small nations.

[knownothing]

Yes. But I already stated that in my response. We do not know the future and you shouldn't trust anyone who tells you differently.

My point is that there have been skeptics and people saying it's a bubble or too volatile for nearly all of Bitcoin's history. But if you bought BTC and held it--at any high or low, for any significant amount of time--you made a lot of money (either realized or unrealized, that doesn't matter).

[goodside]

> But if you bought BTC and held it--at any high or low, for any significant amount of time--you made a lot of money (either realized or unrealized, that doesn't matter).

This isn't entirely true. If you bought Bitcoin anywhere near the height of the late-2013 mania (which is of course a lot of people, since that's why the price was so high), you lost half your value within a month or two and then had to hold until 2017 before you started to break even. You lost 70% if you held for a year and a half and gave up.

The market from June to November 2011 was even more disastrous, falling from $29 to almost $2 and not recovering until February 2013.

These are obviously cherry-picked dates, and you'd clearly have made a profit eventually if you kept holding, but it's still very possible to hold Bitcoin for years and lose money.

[knownothing]

Right. You would had to have bought and held until today for my claim to be true (and it is only true at the time I write this). But it's still the case that you could have bought in any peak or trough in the periods you're referring to and still have significant realized/unrealized gains right now.

[krrrh]

Sure it’s true, but it’s a tautology to say it when something is at an all-time high.

[csomar]

The difficult part is holding through the bear period. I'm pretty sure not so many investors can do that.

[mirimir]

The thing is, for someone who bought a year or more ago, anything less than a 50% correction is small. Also, prudent folk take some of their winnings out of play.

[Frogolocalypse]

Bitcoin would have to drop 85% in value from where it is now to only have doubled in value over the past year. I'll take 100% yearly value growth any day of the week.

[geezerjay]

Your argument boils down to claiming that a pump and dump scheme is sound investment because those who enter early can still earn some cash when the bubble bursts.

Ponzi schemes are similarly profitable but for some reason they are frowned upon.

[mirimir]

I agree with you that Bitcoin price is hugely speculative. There have been many bubbles. Most notably, $100->$1000->$200, in late 2013 through 2014, and $500->$10000->??? in 2016-2017. The future is unknowable, but arguably much of the overall ~10^6 increase since 2010 reflects real growth in demand. I mean, only some thousands were fully aware of Bitcoin in 2010-2011. Now billions are.

Even so, I don't believe that it's a Ponzi scheme. Maybe someone controlling Mt Gox accounts orchestrated the 2013-2014 bubble. Mt Gox had huge market share back then. But now, I doubt that any player dominates enough to run a Ponzi scheme.

[Frogolocalypse]

No it doesn't. Bitcoin is money. It is sound money. The ponzi scheme is the fixed asset debt market, and bitcoin is its reckoning.

[lunchables]

That's the same as it's been for the last few years. This isn't even a huge correction (yet) in bitcoin terms.

[ceejayoz]

> But as a store of value, it's actually pretty good.

It's got a pretty short, volatile history to be deciding that.

[zzzzzzzza]

also much more difficult for average person or even gigantic corporation to secure than a physical good e.g. gold. And coins change over time with forks n crap, gold just stays gold.

[nicky0]

It's very easy to secure. Just generate a private key offline and never tell it to anyone.

[y4mi]

Gold is very easy to secure. Just dig a hole and throw it in. Nobody will find it if you don't tell anyone about it.

Seriously! A digital key is NOT easier to secure than a physical one. If anything, it's harder.

Gold only becomes hard to store if we're talking about huge quantities

[nicky0]

Print the key on paper and put it in a safe. How is that not easy?

Or etch the key on a piece of metal, seal it in plastic, and throw THAT in the ground, if your are that way inclined!

I don't see the difficulty.

[lunchables]

You can do the exact same thing with bitcoin. Write the write the recovery key on a piece of paper and bury it in a box.

The advantage of bitcoin is you can encrypt it and store it offline in as many locations as you want.

[mirimir]

Over the past ~7 years, the price has increased by ~10^5. There have been some bubbles, for sure. But all that has paled over the past year. The price could crash, certainly. Still, if futures become available, it could spike a lot higher before it does.

[wpietri]

And this is exactly what makes it a terrible store of value. As Wikipedia says, "The point of any store of value is risk management due to a stable demand for the underlying asset." Stable demand is definitely not a characteristic of Bitcoin.

[sprafa]

one word: gold

no reason it stores value outside of the fact that we all agree that it does, and we all accept it for curreny. Bitcoin is at that point. It's turning into digital gold.

I agree with the original commenter. Looking at Bitcoin as a currency with terrible UX kept me from investing for the past years. Now it's going past inflection point - it's a store of value that will be acceptable everywhere soon.

[wpietri]

You'd do better to spend a minute Googling before saying something so definitive. The use of gold for jewelry and industrial applications outweighs the investment use of it:

https://www.statista.com/statistics/274684/global-demand-for...

Gold has been valued from time immemorial for its unique aesthetic and practical properties entirely aside from its value as a currency.

That's clearly distinct from, say, paper dollars, which indeed have value only because we agree that they do (and because they're backed by the robust efforts of a government, of course).

[monort]

You are looking at the wrong metric, it seems like they count only transactions, not holdings. Only Fort Knox holds over 4000 of metric tons of gold.

[mirimir]

Yes, demand has overall increased dramatically since 2010. And it's still increasing. Perhaps dramatically. You can characterize that as unstable, if you like. But given that my mean cost basis is well under $1K, it's stable enough for me.

[charlesdm]

How much did the value of Peter Thiels Facebook stock go up since he initially invested?

[mrb]

«the price has increased by ~10^5»

Actually more than 10^6: http://bitcoin.zorinaq.com/price/

[makk]

Something that consumes an unbounded amount of electricity is hardly a "non-physical thing."

[vasilipupkin]

Why can't people in Latin America just buy gold or dollars to store value ? I mean it's a circular argument. To say bitcoin is a store of value, there has to be an apriori reason why it has value. It can't be a store of value because it is. Right ?

[ericb]

It is like if you and I took turns paying for lunch periodically and we used a ledger to track who paid what, and who owes who. The ledger itself is bitcoin. The ledger paper is worthless, but the entries on it "have value." For you and I, the ledger "has value" because that's where the history is.

If you printed 50 new blank ledgers, they wouldn't have value because they don't have the history and our mutual agreement.

Bitcoin is the worldwide ledger (WWL).

[matt_wulfeck]

Except it takes usually 2 to 3 days for the ink to dry in the ledger, and costs you $3 every time you wrote in it, and consumed more electricity than your house does in a week, and you do it this way because you want it to be trustless.

[lunchables]

His analogy isn't perfect with all respect to bitcoin, but it is for that explanation. And transaction fees doesn't really matter when it's used as long term value storage for a significant amount of money. The small transaction fee is basically irrelevant.

[vasilipupkin]

I don't get it. why is it a store of value? what makes it have value? For example, suppose I just got paid and I buy bitcoin today. What is the force that will make my bitcoins not be worth 0.5X over the next 20 years ?

[vasilipupkin]

ok, so I had an upsight, to borrow Neil Stephenson's terminology. Speficifcally, that POW coins are inherently flawed. There is no fundamental reason to own one of them.

POS coins on the other hand, are a different animal. If you own a POS coin, you get paid transaction fees for helping verify transactions. Thus, POS coins make fundamental sense, can be valued accordingly and create a reason to actually own the coin - and should, therefore, prove a better store of value than POW coins. Of course, POS is somewhat theoretical, but if Ethereum can pull it off, it should supersede bitcoin. Now, ELI5 why I am wrong, please.

[droffel]

Try this article from Paul Sztorc:

http://www.truthcoin.info/blog/pow-cheapest/

Definitely not ELI5 material though.

[vasilipupkin]

ok, I skimmed through it. I admit, I didn't get it. However, I don't think it addresses my fundamental point: there is no reason beyond speculation to own a POW coin. There is a reason, independent of speculation, to own a POS coin.

[Frogolocalypse]

> there is no reason beyond speculation to own a POW coin.

The incentives of a pow coin align with the users, not the owners, so there's no reason any user would prefer to use another incentive structure.

> There is a reason, independent of speculation, to own a POS coin.

It is not trustless. You are reliant upon the owners not re-writing the consensus rules to your detriment.

[throwaway413]

WWL, now that’s good...checks domains

[seibelj]

Uh... you have to physically store those things? Easy to steal? Can't send to someone across the country instantly? Bitcoin is way better than gold or dollars when you are in an unstable country. People in Venezuela are huge crypto-heads for that reason

[jonknee]

> Easy to steal?

Bitcoin is perhaps the most commonly stolen store of value the world has ever seen. It has its advantages, but being difficult to steal (or lose permanently!) is not one of them.

[seibelj]

Perhaps it's easier to steal in different ways. Computer-based hacks, bugs, social based attacks (phishing, etc.) sure... but harder to break into a house and steal, as the private key can be hidden better. Easy to assume the safe is where 20 gold bars are.

[pfisch]

Pretty sure cash is the most commonly stolen store of value in the world.

[lunchables]

Source please.

[vasilipupkin]

Right, but you could create a crypto thingie that is tied to gold or dollars. I agree with what you said but it doesn't tell me how to calculate the price of bitcoin

[anonymous5133]

It can get seized by the government. Any traditional assets or physical assets that is. Bitcoin and crypto is significantly harder to do that. You basically need to get the private key. IMO, this is the main reason that it is a a superior store of value compared to gold, dollars or traditional assets. If your government is corrupt then it is reasonable that the police will seize your gold. Not much of a store of value if it can just be taken away from you.

[vasilipupkin]

Understood, but that doesn't explain why it's a store of value meaning why can't bitcoin cost 5k vs 10k

[hw]

supply vs demand. More and more people are getting introduced to bitcoin, understanding it and buying into it. There's also a cap on the total number of bitcoins, so scarcity is another factor. Just like why gold is worth X instead of X/2

[geezerjay]

> More and more people are getting introduced to bitcoin, understanding it and buying into it.

That's pretty much the definition of a pump-and-dump scheme.

[vasilipupkin]

ok, but gold sometimes is worth X and sometimes X/2, if you actually plot the chart of gold. Gold is not exactly a great investment

[jcoffland]

Why are you easily able to see gold as having intrinsic value but not Bitcoin? Both are valuable because a lot of people say so. There is no other value but utility and most currencies, including the dollar, do not have any utility other than their ability to function as currency.

[vasilipupkin]

Gold has physical value, right ? For example, used in electronics, jewelry, etc. but gold is a terrible investment so if bitcoin is like gold should we also assume it's a terrible investment like gold ?

[cordite]

I like the concept, but it’s rate of change and lengthy transaction period and confusing transaction fees make it inhospitable for goods and services that I’d use it for.