[tw04]

>it's liquidity, which bitcoin has far more of then any other cryptocurrency.

"Far more of than any other cryptocurrency" is kind of a moot point. Does "bitcoin" (the people converting it to cash) have enough reserves in any real currency to cover even 10% of its value? There's no federal government backing it, and as best I can tell nothing to prevent the proverbial "run on the bank".

I still struggle to see how bitcoin has anymore intrinsic value than collecting pokemon cards. It's worth something right up until it isn't without a major government supporting it.

[tgraves83]

It doesn't sound like you bothered reading the link I posted. Price volatility caused by a "run on the bank" doesn't really matter if you are sending payments between two people using different currencies. The link I posted describes an app that as an example allows a payment to be sent from someone in the US to someone in Europe and have it settled instantly. Bitcoin is only used on the end of each transaction and converted in and out of dollars and euro's instantaneously making it's price irrelevant.

The intrinsic value argument is old and tired at this point so I'm not even going to bother with it.

Yes, Bitcoin at this stage is extremely volatile and anyone buying it to hold as an investment should understand it can lose or gain a lot of value quickly. However, it does have multiple use cases at this point that clearly the market has determined have some type of value. We're still figuring that out.

As a side note, if you do some digging you can find some pretty good on-chain analytics that can theoretically put a sort of floor on the price based on how coins have moved over time. There are now quite a few sites like glassnode.com, cryptoquant.com, coinmentrics.io etc that provide this data or if you are technical enough set up your own node and verify it for yourself.

[tw04]

I DID read the link. As with everything bitcoin related, the actual meat of the problem is hand-waved away with marketing BS.

>Strike then takes the bitcoins and automatically converts them back into Euros using its real-time automated risk management and trading infrastructure.

Really, they convert Bitcoin into Euros with a "real-time automated risk management and trading infrastructure"? That explains literally nothing. Who owns the Euro currency that is willing to sell it for bitcoin? Where is the liquidity coming from?

[tgraves83]

Have you ever used a cryptocurrency exchange? I admit, there have been some bad actors in the space as there is in any nascent technology, but at this point there are a number of legitimate and even regulated exchanges in multiple jurisdictions.

You can easily look up the volume traded on these exchanges. There are still some shady exchanges out there so I’d mainly look at the more trusted/regulated ones like Coinbase Pro, Bitstamp, Gemini, Kraken etc.

Strike has already released a working app for US customers that I’ve been using without issue for payments to friends and family as an alternative to Venmo/PayPal.

[tw04]

I guess you still haven't explained where the liquidity is coming from. Coinbase and the rest explicitly call out the fact that there is NOT instant settlement, and that your request may or may not be fulfilled at the agreed price.

That means Strike needs to have reserve currency to cover any fluctuations between the time they "instantly settle" your transaction, and when they actually are able to convert that into USD or Euro or insert currency at an exchange.

I keep getting downvotes and yet nobody can explain the magic handwaving to me with anything other than "but my transaction worked". It's great that's working when their transaction flow is probably measured in the hundreds of thousands of dollars, but plenty of pyramid schemes churn along just fine until they grow.

[tgraves83]

I believe Strike is upfront about the fact they are using the stable coin USDC at the exchange for that part of the transaction. USDC is backed by Circle and Coinbase and is probably regarded as the most trusted centralized stable coin. The downvotes are probably because of the “intrinsic value” and Ponzi scheme arguments which people that have been in this space for a decade have grown tired of.

[Erlich_Bachman]

> "bitcoin"

What does using quotes mean? Why not just write Bitcoin?

[arnavs]

You're right to distinguish between currencies with exogenous demand (like USD) and those like BTC. But the "bank run" comment makes no sense, even for beanie babies.

Bank runs exist in a fractional reserve context -- because banks lend out their deposits (which stimulates growth), your listed balance is actually an IOU. That is, an obligation to "cover" deposit balances, which can be met or not.

Now think of people trading beanie babies. One person sells a beanie baby, the other person parts with $10k. What is there to "cover"? Who is keeping what in reserve? The answer is nothing and nobody --- in a world where beanie babies were currency, this would be perfectly fine.

tl;dr you actually need (fractional-reserve) banks for a "run on the bank"