[RestlessMind]

> Who can look me in the eye with a straight face and say bitcoin protects against volatility?

In 5y, 1 USD went from 3.44 Turkish Lira to 17.94; Sri Lankan Rupee collapsed overnight from ~200 to ~360 per USD. Argentine Peso went from 17 to 134 per USD in 5 years.

I can easily look you in the eye and say that for countries with shitty governance and poorly managed economies, Bitcoin is a far better bet than their local currencies. So far, a common alternative was USD but after it was demonstrated that even a nuclear armed country like Russia can lose its USD reserves overnight, I think a lot of countries would be looking for alternatives. Bitcoin and Gold are credibly neutral alternatives.

[igorkraw]

You are simply saying one of two things:"deflationary thing would be nice to keep your savings in" and "the USD is a strong currency". What kept people from buying gold, bitcoin or commodities or other speculative assets in those countries? The fact that they are still a bad currency, because a currency is ultimately what your state demands taxes in and wants/subsidizes for transactions to be in. A currency without a state is just a ledger with faithful devotees, and as we see with tornado cash and the continued lack of a bitcoin or Crypto economy producing basic things like food, it faith doesn't seem to be enough (which is ironic because we call traditional currencies fiat now to differentiate from Crypto, when we should call them tax-based and fiat respectively)

[ljosifov]

+1 on this, you nailed the issues exactly! Bad fiat currency is simply a proxy for bad state, bad government, bad governance. USD is safe and sound as long as USA and USG are. Would reuse tax-based and fiat-crypto - you got that right too - except for fear of all mighty confusion. :-) Money, currency, banking are confusing enough for most people already.

[RestlessMind]

> USD is safe and sound as long as USA and USG are.

I agree. People living in USA or Eurozone may not see the need for BTC since they have good stable governments with well-managed currencies[1]. People outside of those pockets, however, need some option to escape from their governments' corruption and tyranny. BTC is a neutral, and hence better, option. Because if your country falls out of favor of USG, your savings just became a collateral damage when USG imposes sanctions n all.

[1] this sentence might come as a shock to some since news media constantly paints apocalyptic picture. But US and Eurozone is a really good area of the world to live in.

[ljosifov]

Yes, agreed. I understand what you mean. I grew up in "in Europe but not quite european" country. I hope at some point e.g. BTC version 23 is going be as convenient to use as is a credit card - no need to DL 300GB, wait 10 mins for transaction etc, but yes still I can hold my own keys. That will be the technical part solved. The societal part - where we place trust in yet unknown future people, removed from us in place and time, to do useful stuff for me b/c here&now I do useful stuff for third set of people - will follow. The best system that's evolved this far, Fiat - or as a grandparent wrote tax-backed money - is abused often (not by US, EU - they are the good guys; plenty others like Zimbabwe, Yugoslavia etc impoverishing millions - they are bad guys) enough that there is scope for improvement. Trust can be proxied as simple as 1-5 stars... but that may need lots of control - and so on.

[RestlessMind]

> The fact that they are still a bad currency, because a currency is ultimately what your state demands taxes in and wants/subsidizes for transactions to be in.

I guess you have not lived in a third world country. I have, for multiple decades. And I have seen first hand how black market or under-the-table transactions work. There is a huge economic activity in corrupt countries which happens out of government taxation reach. Bitcoin is a perfect instrument for that. Bitcoin or USD or Gold are great options for preserving value of your savings in such countries. For ordinary transactions, Bitcoin or USD are much better since Gold is harder to exchange in exact quantities needed for the transaction.

[ljosifov]

Done that. As a store of value - USD has lower volatility than BTC => USD wins as a store of value. As a medium of exchange - USD paper notes are more convenient to work with (on balance) => USD wins as a medium of exchange. Hence - people in 3rd world countries are not silly or un-informed to prefer another country fiat currency (from a - comparatively - well enough run country), over theirs' (badly run) country fiat.

[RestlessMind]

> As a store of value - USD has lower volatility than BTC => USD wins as a store of value.

Depending on your place of residence, USD may have a high tail risk if your country decides to cross USG's plans. For those places, better to have a non-USD non-EUR alternative. Only Gold and BTC come to my mind.

[ljosifov]

Even when the country gov is hostile to USG, the citizens will still use USD. Citizens use cash, USD notes - not USD bank accounts. No bank accounts are involved. The relations between USG and the local gov bears no consequence to the use of cash. I saw through civil wars in the 1990s, and did not see a single use of gold for anything. The next big state fiat was used for everything. Sorry for the downer.

[smileybarry]

In 1y, 1 BTC went from USD$47,113 to USD$24,735 (365 days period). If you compare from the high point, it went from USD$67,582 to USD$24,735. Doesn't sound like a good store of value, sure it's (theoretically) better than the 500% inflation of the Turkish Lira but anything is better than that.

> [...]but after it was demonstrated that even a nuclear armed country like Russia can lose its USD reserves overnight,

That's purely due to sanctions, which can affect cryptocurrency as well due to the entire ledger being public.

[knocte]

> That's purely due to sanctions, which can affect cryptocurrency as well due to the entire ledger being public.

Woah boy, that's a lot to unpack. I guess you heard some news about recent sanctions to TornadoCash... and then you thought that cryptocurrency can be confiscated/frozen as what happened with Russian's USD reserves?

What has happened so far: some arrest of at least one developer, some freezing of some (centralized-)stablecoin accounts, some closure of github accounts, etc. But pure (as in, not centralized stablecoin) cryptocurrency stored in cold wallets cannot be frozen at all; and that's the whole point of cryptocurrency.

[smileybarry]

No, I was not referring to or using Tornado as example here. I was referring to US sanctions on Russia forbidding trade, therefore causing Russia to fall back on their reserves and unable to access further USD reserves.

Cryptocurrency is vulnerable to this as well because, even if you have a cold wallet and run your own node, your transactions are still public and taint every wallet that receives your coins. Vendors might not want to trade with you so that they don’t get the same treatment, exchanges might not want to risk their entire liquidity to cash your BTC out, etc.

[knocte]

> ...but anything is better than that.

And how many Turkish people can hold something that is not Turkish Lira as easily as bitcoin?

[ljosifov]

Indeed everyone holds non-local currency too. I'd presume USD and/or EUR have taken on the role of "store of value". I lived through collapse of a state 30yrs ago, and exactly that happens: locals refuse to hold the local currency (that reflecting on the health of the state is quickly losing value), there is a vigorous fx exchange market (either white-legal, grey-tolerated, or black-illegal but existing), and locals exchange their savings from local to foreign fiat currency. No one ever used gold, not once I saw gold being used for anything. Nor any other commodity. Foreign fiat currency that is stable is much more practical and convenient. Until BTC is as convenient as a credit card, can't see it used as "means of exchange". As store of value - maybe, but foreign currency maybe again more stable less risky (on humant time horizons), so again wins for that too over BTC. Sorry for the spoiler.

[smileybarry]

How would they hold bitcoin to begin with if they need to pay for local services? How would they get paid in bitcoin, or do they need to convert their funds to bitcoin ahead of time? In such a case they could’ve easily picked USD instead.

[siwatanejo]

Holding foreign currency (USD)is not that easy and if there is a "corralito" event like the one that happened in Argentina, your USD is at risk too.

[vbezhenar]

Dollar cash is as valuable in Russia as it was before. I don’t know why countries use electronic dollar. Just use cash. Nobody can arrest it. I don’t know the precedents at least. If Germany would refuse to accept those, Chinese will accept it.

[golergka]

Last time I checked, it was illegal to take more than $10k out of Russia per person. Even private plane passengers were thoroughly checked for cash (something completely unheard of before). And yes, governments all around the world have, and will arrest your cash.