[IkmoIkmo]

What I'm always missing from the discussion around bitcoin and its price is: what are reasonable KPI's to measure its success, its impact, its utility etc.

When you want to value an organisation or company, it makes sense to look at these KPIs. They could be purely financial, e.g. profits, revenue, margins. Or they could be more fundamental, number of users, or rather, number of times a person has benefitted (e.g. # of one-night stands or relationships that Tinder generated).

What are these KPIs or metrics for bitcoin, that can tell us it has value, beyond the speculative?

When I invested in bitcoin in 2013, there was a lot of work to get user-adoption. It was seen as the way forward, also to create a return on your investment. we used to track numbers on # of wallets, # of daily transactions, # of merchants accepting bitcoin, # of volume on exchanges. Over time it began harder to differentiate true numbers from fake numbers, e.g. exchanges became notorious for faking transaction volume as a marketing tool. But overal, the general idea was that after 2015 or so, the number of real-world transactions and active (non-zero volume) merchants either declined, or in later years at least was not growing at remotely the same rates as the price of bitcoin.

Whereas I used to use bitcoin for various things and saw others do it, too, today I can hardly point to a single person or company which has utilised bitcoin in a way that isn't speculative. There's no positive KPI or metric that I can point to, except speculative ones (e.g. price).

If I survey my friends, the only reason they give to buy bitcoin, is that there's an expectation the price will keep going up. Yet, the work on user-adoption of bitcoin (i.e., real-world usage, not merely investing) seems like it's not at all part of anyone's calculus.

That's the reason I sold all my bitcoin some time ago. Although I would not at all be surprised that the price will keep growing, I can forgive myself and justify me having sold. But if the price falls it'd be entirely reasonable, and I wouldn't be able to justify my choice not to sell.

There is obvious real technology here in having a database/ledger that's not under control of 1 centralised party. But a decade later I'm not seeing anyone exploit that value outside of the speculative investment side.

Btw, I believe there's potential long-term value in bitcoin merely as a store of value, a digital gold. But right now there's still a pretense of something more. Second, the store of value ideal only applies to one coin, not the trillion other crypto variants. And it requires trust and faith (over decades/centuries) in one particular fork of Bitcoin. There's only one chemical that's pure gold, but one could create infinitely many bitcoin forks.

[axg11]

What are the KPIs for any store of value? I don’t think you can value Bitcoin in the same way you value a revenue generating business. I think the value makes more sense when you look at it as an abstract and digital store of value to replace existing solutions that require trusting another party and are subject to easier censorship.

I think looking at the total number of transactions on the Bitcoin blockchain doesn’t tell the full story anymore either. There are thousands of new cryptocurrencies and other solutions, each with transactional activity. Increased usage on Ethereum, lightning network, Solana, etc indirectly benefits BTC, since, BTC is the tried and tested protocol with arguably the most decentralisation and no figurehead.

[olalonde]

Controversial opinion.

I love Bitcoin the currency, but IMO a major barrier to adoption has been the community's reluctance to embrace "off chain" payment systems. Bitcoin's network is simply too slow and expensive for the majority of day to day transactions. And there are fundamental reasons for that which can't be fixed with a fork or an altcoin. It should be used as a settlement system, for moving between payment systems and for large transactions (e.g. Coinbase -> Hardware wallet, Hardware wallet -> Pay credit card bill, Coinbase <-> Binance, etc.).

Now what if Visa added BTC as a supported currency? That would be big for adoption. Consumers could pay their bills directly in BTC. Merchants could receive BTC from Visa. What if some entity (El Salvador?) issued BTC backed bank notes? BTC could be used just like cash. Basically, all criticism about the Bitcoin payment network would become moot. But the "on chain" system would still exist when you need it and the currency would still retain its important properties.

Unfortunately, the previous paragraph sounds like a nightmarish scenario to the average Bitcoiner.

[jerf]

What do you consider the KPIs of the US Dollar?

Not intended as a gotcha, I'm curious what you mean by it and examples seem a reasonable way to find out.

[IkmoIkmo]

Accepted and used in 99% of every real-world transactions by the biggest economy in the world, used by 99% of the merchants and 99% of the citizens in this economy.

But I'd say that perhaps it's not the best comparison. Few people are looking to purchase dollars for the sake of holding them as an investment. There's of course tons of volume on Forex markets for hedging and speculation, but regular citizens aren't looking to purchase dollars for investments, i.e. in order to generate a return on dollars-held.

Typically people use dollars as a medium of exchange and the way in which prices are commonly expressed. But anyone with sufficient dollars will want to use them to hold assets, whether they're a home, stocks, or simply low-risk treasury bonds, the idea is that dollars give access to these assets, but few are looking to simply buy and hold as many dollaras as they can in order to generate some kind of a return.

Bitcoin is also a technology in a way that the dollar isn't. The dollar is an idea, backed up by lots of different technologies both analog or digital. Those technologies don't necessarily have much to do with the price of the dollar. Nor do dollars have to have a certain price for them to be used, in a way that for many years, people expected individual bitcoins to be value (and thus naturally to go up in price as demand for these tokens went up) because the tokens would be used in various technological applications... That hasn't materialised, which makes the increasing value of the tokens somewhat non-sensical.

[GoblinSlayer]

>Accepted and used in 99% of every real-world transactions by the biggest economy in the world, used by 99% of the merchants and 99% of the citizens in this economy.

That's attention economy, isn't it? I imagine people who own a few USD aren't as interested in it compared to people who hold a lot of USD.

[rjzzleep]

A chokehold on international payment remittance. Every single USD transaction in Taiwan passes through a US bank. A handful of countries are organizing their own crosscountry remittance systems. Until then, the US can effectively cut any country off international transactions when they feel like it.

[GoblinSlayer]

>A handful of countries are organizing their own crosscountry remittance systems.

USA can just bomb them into the approved currency.

[ur-whale]

Here's a KPI: do you find it useful for something other than the fact that the price might go up?

I know I do, for a fairly large number of reasons, many of which revolve around "protecting value".

And also: the price has a tendency to go up long term, nice icing on the cake.

[IkmoIkmo]

> Here's a KPI: do you find it useful for something other than the fact that the price might go up?

I don't personally, I don't use or own it anymore. Could you explain more about your uses?

> I know I do, for a fairly large number of reasons, many of which revolve around "protecting value".

Protecting value seems (without knowing more) to imply a circular reasoning: the price going up protects the value of the token, that's why it's useful. But that's a speculative reason, no different from the price of a tulip bulb going up, has value because it protects the value of a tulip bulb.

I'm almost certainly misreading you but I'm just speculating as you haven't expanded on the large number of reasons you mentioned.

[ur-whale]

> "protecting value".

Protecting value as in: other people can't take it from me short of physically torturing me. And that'd be assuming they even know I hold any.

Also: I can donate it to whomever / whatever cause I want, whenever I want without anyone, any law or any government being able to prevent me from doing that.

Also: I could be rich, I could be poor, no one knows, even folks in my close social network. My net worth is my business and mine only. Things only become visible when I actually decide to use some of it in the economy.

Bitcoin allows me to do all of the above. Very few other assets do. I consider this very "useful". The price appreciation, as I said, is just "nice to have".

[stnmtn]

As far as I can tell, everything you described (Maybe with the exception of donations) is the exact same as a bank account you don't tell anyone about.

Do banks really start to bother you if you have multi-millions in there or something?

[ur-whale]

> the exact same as a bank account you don't tell anyone about.

You clearly have never been on the business end of law enforcement gone wrong.

[bpolovko]

Can you really apply KPIs to that? Can you apply KPIs to gold?

[IkmoIkmo]

As I noted in the last piece of my post, I believe there's value in bitcoin being a store of value. It has proven itself there and is a contender to Gold in that respect.

But there's no pretense around gold as having technological uses that require it to have a certain price, or that drive its price due to the technological demand for gold, in a way that people keep claiming for bitcoin tokens. Gold is used in tech applications, but it's not what is generally driving its price.

But insofar as you do want to look at gold's uses, it's pretty easy to link them to KPIs as they benefit end-users/consumers/companies in electronics, jewellery, space, medicine/dentistry.

The fact the responses so far are all comparing bitcoin to gold or dollars as a store of value, not as a medium of exchange, and not as a token or ledger that's useful for anything else (e.g. a notary function, or an open-source finance platform used by most tech companies to exchange value like the internet protocol or email protocol was for exchange of information), seems to me that crypto is not very interesting anymore for entrepreneurs, technologists, developers, users etc.

But rather, that it's just an asset class, one that's highly speculative and volatile vis-a-vis comparisons like gold. Interesting for investors, but not users. Just like gold.

* put differently: The internet protocol is driving just about every digital tech company. From Facebook to Netflix to Google to Apple. Bitcoin was aiming to be the digital money protocol, but it's not driving the financial infrastructure for any companies or end-users apart from those in a speculative sense.

And that's okay, if it's just a store of value / asset class like gold, but then it should loose that pretence.