[PKop]

It's a non-sovereign store of value (potentially). It's not meant to substitute completely for fiat credit for day to day commerce or transactions, just to be used a store of value to hedge currency debasement which is coming due to so much sovereign debt. It's gold in a more transmittable form.

You spend and transact mostly in fiat, you borrow in fiat. You save some percent of your earnings in more finite stores of value (you and everyone else already do this so the concept is not controversial).

The idea is explained here: Ctrl + F "two monies"

http://fofoa.blogspot.com/2011/05/return-to-honest-money.htm...

[unmole]

> hedge currency debasement which is coming

You're honestly going to claim that an asset that is down more than 40% YTD is a hedge against inflation?

[PKop]

As long as Federal reserve keeps tightening monetary conditions, nothing will beat cash. The argument is though that they cannot continue down this path as the amount of debt in the system will result in everything breaking as a result of this tightening.

Also, you do realize this point of view "muh down YTD" is a meme comment yes? Stare at any 6month period of any chart and you can make any argument you want. Are stocks not inflation hedges generally? Yet they are down YTD too. In the period of monetary expansion from 2020 through 2021, did not BTC do just fine hedging this monetary expansion? Even in Wiemar Germany, gold did not go up in a straight line, it was extremely volatile. BTC is more volatile than almost anything else that still long term has worked to hedge expansion of liquidity. BTC moves in line with growth or contraction of liquidity better than anything else. Just look at the charts.

Additionally, my point is this is the framework. It can also be a failed experiment. But there is no scenarios where a finite asset can replace fiat currency. There is theoretical basis for same asset to replace other forms of scarce stores of value. In principle, BTC is a SoV asset, not a transaction currency or unit of account by virtue of its technical fundamentals (un-inflatable supply, expensive to transact, slow).

[unmole]

What do you actually mean by hedge?

> BTC moves in line with growth or contraction of liquidity better than anything else.

> In the period of monetary expansion from 2020 through 2021, did not BTC do just fine hedging this monetary expansion?

How is it a hedge if it moves in line with liquidity?

Why is expansion of liquidity is something one would need to hedge against?

[PKop]

Because some portion of cost of living will expand with it..housing prices, other financial assets and therefore wealth of those investing in them, and in the future, costs of commodities and other consumption items as investors drain the stored energy in these "liquidity capacitors" and the money flows into the real economy.

"mitigate the potential negative effects of" I guess..

>How is it a hedge if it moves in line with liquidity?

I don't know what you're asking? Liquidity expansion inflates assets, and BTC inflates more than almost anything, especially over a multi-year time frame.

It hedges just holding cash. It hedges the opportunity cost of not investing while invest-able assets are going up in value, and wages on a relative basis are not.

>Why is expansion of liquidity is something one would need to hedge against?

Sort of a philosophical question lol. Maybe you don't. If one wants to invest at all (why though?) this is a framework for thinking about that process.

[unmole]

A hedge is meant to control risk by taking an offsetting position. Whatever you're describing is most definitely not a hedge.

[alexb_]

>BTC inflates more than almost anything

What the everloving fuck are you talking about? Bitcoin is deflationary to the point that nearly everyone uses it as an "investment" vehicle, not to actually transfer money. Do you even know what inflation is?

[PKop]

Its price inflates. Prior to 2021 when people talk of the Federal reserve keeping rates low, general price inflation was low, but there was "inflation" in asset prices. This is what I'm referring to. Monetary inflation existed and it flowed into financial assets.

[lottin]

You can't expect to make sense of a complex phenomenon without having a proper conceptual framework and terminology.

[PKop]

It sounds like you have those, so let's hear it...

[newsclues]

So it’s like paper certificates for gold!

[PKop]

Without looking at details too much, it's seems significantly different than paper claims on a separate physical asset held by a custodian 3rd party subject to counter-party risk.

The control of the BTC is maintained with possession of the private key stored in the bearer asset cash.

Holding gold certificates does not enforce any fundamental claim or control of the actual asset the backs the paper; possession of the physical gold does. You need to trust somehow that the holder will exchange the gold for the paper in the future, as well as actually have the gold at that time.

[yoavm]

Well, here you need to trust that their app will exist next year. And perhaps also that something will happen when you cut the notes, but I'm not sure I got that part...

I don't know if it exactly like gold certificates, but it sounds pretty close to "I'll pay you with cashews" to me. It's not terrible - I bet a many people exchange goods like this every day.

[throwntoday]

Aren't like 90% of all bitcoin held by a few whales? Why would I want any part of that system it has worse distribution than fiat.

[capableweb]

I'm curious about those numbers for both cases myself, but I know that only one of them you can actually get the numbers from (although only the number of coins in wallets, not coins belonging to users, as a user can have many wallets), the other one is completely in the dark as no one can really say who has what.

Since we can't know the numbers for fiat, we can at least try to understand it for Bitcoin. As far as I can tell, sources seem to point towards the number being closer to ~2% of wallets hold ~70% of all Bitcoin.

If this is a better/worse distribution than fiat, we will never know.

[fartcannon]

I think thats generally believed to be hot wallets for exchanges, but if it is true, it's about the same as the stock market so you're probably already engaging in something like that: https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-...

Bitcoin is a nice mirror to look into. We need to eliminate money, go full star trek post scarcity utopia.

[rchaud]

> We need to eliminate money, go full star trek post scarcity utopia.

Electricity is scarce, and unholy amounts of it are needed to create this post-money utopia.

[spicybright]

If not infinite unless we really re-think how personal freedoms should work.

[yunohn]

> I think thats generally believed to be hot wallets for exchanges

Could you source that claim? I find it absurd that you think such studies haven’t considered crypto exchange wallets in their analysis…

[fartcannon]

You don't need a study, you can see the biggest wallets on sites like this: https://bitinfocharts.com/top-100-richest-bitcoin-addresses....

It's all public knowledge.

[jazzyjackson]

and all the gold is locked up at ft knox, I still want some for myself (: