[rulum]

I don't think bitcoin "rose to such heights" in terms of success. It appreciated in value arguably due to a speculation despite having no legitimate use (as of yet) due to its deflationary nature. So everyone wanted a piece of the pie before it ran out, the perceived scarcity drove people to get some and hoard. Hoard something that had no use.

In my opinion, a future successful digital decentralised currency should find a way to prevent itself from being seen as an "investment opportunity". That is not what money is for. That attitude creates bubbles, and "get rich quick" types. You can't have functional money without price stability. The deflationary property of bitcoin works against that.

So IMO bitcoin appreciating in value and creating bubbles along the way is not a good thing for bitcoin itself. You shouldn't need to "invest" in a currency, you need to use it. It needs to be trusted and accepted.

Many people remember the million dollar pizza now. No one wants to be that guy. Even if BTC was universally accepted now, not many holders would dare to use it to buy things. Because in their mind, BTC is poised to appreciate in value whereas fiat will collapse, so they'd use their fiat instead. If you have $5 in one hand, and a lottery ticket with perceived high odds you bought for $5, and the store accepts both as payment, why would you use the lottery ticket to buy things?

[_5ysi]

I agree that bitcoins problems include not having relatively fixed-rate use cases in the future, like paying taxes and your salary. And you make a good point that it will be socially easier for society to adopt a new currency if early investors aren't getting 10x returns for being first.

But any new currency is going to offer the opportunity for capital gains as long as it's competition includes the U.S. Dollar, because almost by definition a better alternative to the dollar would be deflationary relative to the dollar.

My point is that small rates of deflation aren't bad in a currency and bitcoins fixed size is not really a problem as long as you can trade small enough increments. Also fixed size is not even deflationary, it's just fixed unless something beneficial happens on the demand side like manufacturing cars with less materials.

At the same time fixed size is not really a feature though either. You have the whole number line available why not use it?

Bitcoins real problem is that it's not a "victory against entropy" like gold coins were in ancient times or reserve notes which can appease Uncle Sam in the future are today. Bitcoin is quite the opposite in fact, because we are dissipaiting so much concentrated energy to maintain the system. It's ironic because bitcoins greatest success is making us imagine currencies that don't dissipate value.

I'm pessimistic that there is a distributed solution to this beside just electricity or energy itself, and we're obviously not quite at that point technologically yet.

[tekknik]

It does have legitimate use cases transferring value digitally being the primary case and also providing means to accept digital payments with little to no fees. Also you invest in whatever your countries currency is via time, so buying BTC with fiat is no different. Deflationary currencies also don’t contribute anymore to hoarding than high savings rates. Bitcoins main issue here is that it’s not a country’s main currency.

[rulum]

>It does have legitimate use cases transferring value digitally being the primary case

I am not convinced that what is being transferred here is value. It's transferring data, but I am not convinced that it is valuable. If it was out only option, then I guess I'd see the value in that, but in the current landscape, I'm not convinced that it is an efficient and sensible way of doing what it is trying to do.

>also providing means to accept digital payments with little to no fees.

Fees are variable. In real world volume (which it can't touch or sustain yet), the network cannot sustain the volume and the fees are exorbitant. I know, you'll say "it will get better, infancy" etc. but I'm not convinced. I don't see the value of decentralisation here so the overhead looks massive to me. And in the end, if bitcoin takes off as a successful alternative for high volume low fee transactions, the centralised industry can compete and they have the upper hand: Centralised version has orders of magnitude less overhead so they can make the fees cheaper than BTC always if it came to that. So that advantage is moot.

>Also you invest in whatever your countries currency is via time, so buying BTC with fiat is no different.

No, it is different. When I earn money, I intend to use it or invest it. I don't see my money as an investment which will appreciate in value if I "hodl" it. Money itself is not an investment. You invest with it.

>Deflationary currencies also don’t contribute anymore to hoarding than high savings rates.

[Citation needed.] Deflation literally is economic crisis where people hoard and refuse to spend which brings economy to a halt. Central banks use their policy to encourage people to spend. Deflation is our "crisis" state.

>Bitcoins main issue here is that it’s not a country’s main currency.

It is an issue but IMO it is quite a bit far from being the main issue. Bitcoin is technologically incapable of being any country's currency right now, the throughput alone is not even close to enough.