> Given that bitcoin isn't a medium of transaction anymore and a store of value this makes a lot of sense.
Can someone bother explaining what this actually means? 3 weeks ago everyone is hype about how Bitcoin is going to be the future of currency and now that it's tanking and vendors are dropping it like a hot potato, its no longer a transactional currency and it's now a "store of value".
Bitcoin is currently the crypto equivalent of gold. It's not reasonable to use it to buy a coffee. However, Bitcoin is trying (but many would argue, failing) to upgrade the network with something that will allow cheaper/faster transactions and make it a reasonable currency again. However, (imo) in-fighting has seriously hampered this. That being the reality, many people hope that Bitcoin will remain a store of value into the future, even if most people are using some other crypto for actual day-to-day transactions.
There are "old-school" cryptos with lower transaction fees (Litecoin, Bitcoin Cash). There is not much reason to use them as an actual currency except for the fact that they have more inertia than most other projects (and therefore more things have been built around them). In particular, most places that had some sort of Bitcoin integration can very easily switch to Bitcoin Cash for much lower tx fees.
There are many cryptos that are trying to be currency in a permanently scalable way (IOTA, Ripple, Stellar)
Other cryptos are trying to be cash, i.e. anonymous (Dash, Monero, ZCash).
Most others are either A. intended to be more platform than currency (Ethereum, NEO, EOS, Tron) or B. too small to mention.
No, Bitcoin is the crypto equivalent of Monopoly money: it is unreasonable to use it for anything but little fun. For real world use cases there are better solutions, including other cryptocurrencies.
There was a recent bit on NPR (Planet Money?) where they interviewed young people in Seoul - they had so little faith in their ability to earn a living and save money by working a regular job in Korea they were putting all their savings into Bitcoin and other cryptocurrencies and hoping to hit the jackpot. It was alarming.
> Low-income South Koreans are finding it harder and harder to rise to the middle or high-income classes through their own efforts and abilities, a recent study shows. Just two out of every ten households saw their economic status rise through increased income and assets over a three-year period, the findings indicate.
Crypto provides an alternative economy where class mobility isn't broken in the same ways. Youth will continue to flock to it until the local economies sort themselves out.
Thanks - same print source it seems, maybe different radio story - that's dated today!
South Korea now sounds like Japan of a few years ago before China got in the WTO, Japan was the "big threat" to US manufacturing/exports of that time, so Japan got a close examination for things the US could learn to copy. But it also sounds a bit like US today or maybe it's all around the world - the college grads not seeing a lot of opportunity for the average or even superior college experience from those examples. It feels like the world is in a lot of trouble if this is true for most college grads everywhere.
It's not gold. Gold has a long history of being a stable store of value. I could buy gold now and sit back and not worry that the price was about to fall through the floor. Owning bitcoin is not the same. At any moment it could tank. If all the investors suddenly got interested in Pokémon cards they would be just as useful as a store of value.
> I could buy gold now and sit back and not worry that the price was about to fall through the floor.
Lots of people have believed that in the past. Sometimes they've been right, sometimes not. The future supply of commodities doesn't always follow expectations.
> Bitcoin is currently the crypto equivalent of gold.
Why is this a good thing? Nobody uses gold as a store of value anymore because it just wasn't viable going forward. Why would Bitcoin be any different?
Most of the central banks have gold reserves as a store of value, some of them expanding them (most notably China and Russia). For individuals it is less popular, but still I wouldn't say "nobody uses gold".
But aren't those gold reserves a tiny fraction of the actual cash circulating in the economy? What use does Bitcoin serve in this aspect? And I don't think that Bitcoin and Gold are really comparable. In the event of some national/international crisis, the gold is still going to be there. I don't think you can reasonably make the same guarantee about something like Bitcoin.
To me it sounds like the kool-aid for those who bought it at $15-19K and now realize that the only way to see that money back is if another wave of irrational buyers creates enough demand to pump the price up.
The pro-bitcoin people endlessly repeat analogies with gold, except gold price has not been growing since its peak in 2012 and it's only used to store value by governments due mostly due to conservativeness (know a politician willing to kill his career by switching the country's gold reserves to any other security?). Aside from that, I don't see anyone else using gold instead of interest-generating assets (stocks, bonds, real estate).
Currently Bitcoin transactions are very expensive (~$10-$20) and painfully slow taking hours to propagate. There are many more cryptocurrencies that are faster/cheaper such as Litecoin and even ETH (even though it's no _really_ supposed to act like a currency). Also there are some really cool platforms coming out such as REQ and Stellar which will arguably serve as better mediums of payment. The hype in crypto has cooled off a bit from last month's mania, however there is still a lot of innovation going on. This is why you see Bitcoin "regressing" into a store of value.
3 weeks ago Bitcoin was just as horrible to use for payments as it is now. Just no one investing in it knew that, at all. I'm sure it will be around for a long time as an investment, but they refuse to innovate.
Well, there was about a month or two when Bitcoin looked more like a store of value than a medium of transaction at any rate. Fees are starting to look increasingly more reasonable now that the insane growth and massive speculation has stopped. (There's reason to suspect that during the worst of that period, a rather large proportion of transactions were to and from Coinbase/GDAX - not helped by the fact they don't batch withdrawals and have enough revenue to just throw money at transaction fees, which of course drove up fees for everyone.)
They were under a dollar after dropping for several days straight, not sure where they are now or where they're going to end up either in the short term or once SegWit finally comes into widespread use. (It'll probably take a while for the transaction cost estimators and average transaction fees to catch up in any case; there's a lot of software generating very slow, conservative fee estimates.)
> Given that bitcoin isn't a medium of transaction anymore and a store of value
Due to that, I think Bitcoin has failed and I no longer see it surviving long-term, simply due to the fact that there is much better tech out there now in the form of "alt" coins. (Not going to shill any specific coin here.)
What do I mean by "failed"? I got the impression from what I've read from Satoshi that they wanted Bitcoin to be a type of electronic cash and not necessarily only a store of value (see e.g. [0]). Yes, decentralized and trust-less, but still useable for even micro-transactions (from the linked article):
> It could get started in a narrow niche like reward points, donation tokens, currency for a game or micropayments for adult sites. Initially it can be used in proof-of-work applications for services that could almost be free but not quite.
Bitcoin seems very much inspired by Bit gold [1], which summarizes with:
> In summary, all money mankind has ever used has been insecure in one way or another. This insecurity has been manifested in a wide variety of ways, from counterfeiting to theft, but the most pernicious of which has probably been inflation. Bit gold may provide us with a money of unprecedented security from these dangers.
A currency (read: gold) only has value because we, as a society, decide that it does. Gold is a "good" store of value because we have currency depreciation with fiat, so storing your long-term value it in doesn't make sense. What happens when (not if) we stop storing our value in physical things like gold and we create a global digital currency that's fast, secure, trust-less, decentralized, and most of all a stable store of value? (Open to hear discussion on if that is even possible.)
A cryptocurrency with those characteristics has all the benefits of gold, without the need for carrying all that expensive-to-move, heavy metal around with you to be able to exchange any of it for goods. And you could exchange on a global scale, something not possible with gold. Banks would be on their way out, because the people would be in control of their own money.
What happens to government-backed fiat when people can exchange their gold like they would fiat? I'd think fiat would start to lose favor. But I'm not sure what affect that would have on world governments and society. (Again, open to discussion because I'm not super well-versed in these subjects.)
Currently, Bitcoin can't do that in its current form—that is, be easily exchangeable for goods—its simply turned into a digitized gold that has the same issues when it comes to exchange—but I think we'll eventually get there with a coin, and there's some promising altcoins that have awesome tech right now. Maybe that coin ends up being Bitcoin after all. Maybe there will be coins, plural, who knows.
Maybe all that is a bit too utopian and it simply can't work on a global scale with governments. Still interesting to think about.
Is the lack of replacement option an example of the "they will ruin it for all of us" or maybe an overall decrease in confidence in cryptocurrency altogether?
Can someone bother explaining what this actually means? 3 weeks ago everyone is hype about how Bitcoin is going to be the future of currency and now that it's tanking and vendors are dropping it like a hot potato, its no longer a transactional currency and it's now a "store of value".