If it reaches $1 trillion, what happens? $10 trillion? If it turns out everyone moves all their money over to Bitcoin because they're afraid of their fiat currency becoming worthless, how is that going to be a good thing?
Inflation of the dollar will skyrocket and anyone who wasn't holding bitcoin is going to get fucked. How is this going to end well?
Even for the bitcoin holders. If the economy is fucked from inflation and a car costs 50 bitcoins or $50 million of Fiat dollars... that's not going to be a good time for anyone.
It won't happen in a day. If your scenario is correct, economy will transition slowly to bitcoin from fiat. Fiat inflation is not a problem when you have non-inflated currency in a wide use.
At this point everyone remotely interested in blockchain should buy $1-5k of bitcoin and hold it forever. Much better odds than a roulette table, and decent chance it's worth 100x by the time you retire. Or you lose it all. But if you are a rich HN tech nerd then what do you care anyway?
My 70 year old, cant-even-use-a-Mac uncle wants in! I don’t know what to tell him, paper wallet in a vault? How does a guy who can’t even use an iPad buy bitcoins?!
The sad fact is that some people will look at a highly volatile investment and dip in, others will commit their life savings. You really can’t help the latter, and the former doesn’t need help.
decent chance it's worth 100x by the time you retire.
At this point it almost seems like bitcoin is a cult.
It's a piece of software running a database/blockchain. There's now several hundred blockchain service networks up and running.
Why should anyone pay more than a few cents for a bitcoin or database-backed-blockchain-token where the supply was produced for minimal effort and is now being artificially inflated by unregulated exchanges suckering in people who don't know what they're buying?
Maybe blockchains will someday be efficent, but as they stand the only proven use case is speculation due to psychological assumption that the supply is limited .
In economics, the Gini coefficient is the standard measure
of how inequitable a society is. This is tricky to
determine for Bitcoin, as it's not quiet a "society" in
the Gini sense, one person may have multiple addresses and
many addresses have been used only once or a few times.
(The commonly-cited figure of 0.88 is based on one small
exchange in 2011.) However, a Citigroup analysis from
early 2014 notes: "47 individuals hold about 30 percent,
another 900 a further 20 percent, the next 10,000 about
25% and another million about 20%"; and distribution
"looks much like the distribution of wealth in North Korea
and makes China's and even the US' wealth distribution
look like that of a workers' paradise
Dorit Ron and Adi Shamir found in a 2012 study that only
22% of then-existing Bitcoins were in circulation at all,
there were a total of 75 active users or businesses with
any kind of volume, one (unidentified) user owned a
quarter of all Bitcoins in existence, and one large owner
was trying to hide their pile by moving it around in
thousands of smaller transactions. (Shamir is one of the
most renowned cryptographers in the world and the "S" in
"RSA encryption")"
why should anyone pay more than 50-100 bucks for a shiny metal that carries no value beyond the fact that it's shiny and maybe is used in some industries? why should that metal cost 1000 plus dollars an ounce?
For starters the shiny metal does, as you acknowledge, have industrial application. Moreover, you wouldn’t be able to post that comment nor would I be posting this comment without that shiny metal in our respective devices.
Additionally the shiny metal is limited in supply, that is there is a finite amount and you nor I are going to make anymore of it. As OP suggested bitcoin is manmade, it may be artificially limited (21M coins) but anyone can just create a new blockchain and/or cryptocoin for next to nothing.
I myself learned how to create smart contracts and deploy them on the Ethereum blockchain and I have created YC Coin; Reddit Coin; Facebook Coin and Instagram Coin. For just a few fractions of an Ethereum Coin I have decentralized karma and likes across networks with billions of users combined. Separately, I have created tokens backed by real life assets allowing users to buy/sell/trade interest in actual assets on exchanges.
I’ve even begun offering coin/token creation as a service so anyone or any business who wants it’s own community cryptocoin can have one. Now I don’t question why my coins/tokens are worth less than bitcoin, but at the end of the day “why is bitcoin worth more than other coins when they are both artificially finite stores of value functioning on immutable blockchain technologies, providing the same functions” is a fair question. Once precious metals can be reproduced for next to nothing, like blockchains and cryptocoins, then it’s fair to challenge their worth until then I think it’s easy to argue their worth as a store of value.
The price of the shiny metal does not match the industrial usage of it though. Why isn't a store of value considered useful in itself? Don't we gain something by moving away from trading with wampum and sheep?
Price can be based both on utility and speculation, so shiny metals may have higher prices than their industrial usage would imply. It doesn’t have to be just one or the other.
A store of value is, of course, useful, but that doesn’t mean that it should gain a high price. Is there a shortage of value storage, or are there already plenty of ways to store value?
Doesn't bitcoin match that definition? It is not only a store of value but also provides forms of utility that wasn't there before distributed consensus was solved.
It doesn't store value, it's a network protocol and a database.
It's not rare, and the supply was minted for substantially minimal energy/capital input. Satoshi designed an economic model for Bitcoin to reward himself and the small pool of users who ran the software. Anyone buying a Bitcoin for more than it cost to produce it in 2009-2014 is hoping they'll find a greater fool to sell their coin to.
Is litecoin a store of value? Monero a store of value too? Maybe 42 coin is more valuable because there's only 42 instead of "21 million"... oops the network forked and now there's twice... wait four times... wait the network forked again... oh dear.
> It doesn't store value, it's a network protocol and a database.
It's not rare, and the supply was minted for substantially minimal energy/capital input.
I don't agree with any of that.
I suppose the internet is really just a bunch of 1s and 0s and not of any value either using that reasoning.
I’m not sure it’s fair to conclude the price doesn’t match its industrial usage, just based on being an integral component of computers and smart phones, using another electrical conductor while possible would lead to reduced lifetimes of devices...so what is the fair value of something that in other words extends the lifetimes of these devices?
Also, I’d be the first person to acknowledge and promote the function of bitcoin and blockchain technologies too, but I think it’s ok to support bitcoin/blockchain while simultaneously questioning how the monetary value of bitcoin is derived and drawing a distinction between value/worth/function of precious metals and cryptocurrencies. It’s like smart contracts, I’m the first to support and promote self executing programs hosted on blockchains, but I’m also the first to challenge when people market them as functioning outside the legal system or in other ways inconsistent with reality.
I say if you can, own a little of all of them, sheep too. After all gold is only worth something until it’s worth less than a can of soup.
> anyone can just create a new blockchain and/or cryptocoin for next to nothing
... and I can take my shiny metal (gold) and mould it into a replica spanish gold ingot, it doesn't mean my gold bar is worth the same as the original in fact it's worth substantially less.
By creating YC Coin, Reddit Coin or Facebook coin you're not increasing the supply of the original Bitcoin you're creating a replica of the original.
In fact, by creating the vast array of coins you have you're actually demonstrating why none of them have value, they're a dime a dozen and none of them are the original bitcoin. But a 'KarmaCoin' adopted by those websites might have substantially more value (but good luck with that!).
I don’t think creating new community cryptocoins is creating a replica of bitcoin (that’s like saying bitcoin was a replica of earlier cryptocurrencies right?). Obviously I’m not suggesting I’m creating a greater supply of bitcoin, just separate coins entirely with idenical practical functions (stores of value on blockchain traceable on exchanges). But you’ve given me an idea, I think I will create a bitcoin replica (called bitcoin, with 21 million coins) and deploy them on the Ethereum blockchain. People either forget or just don’t know bitcoin itself was given away for free to start, the first recorded purchase was a publicity stunt of 2 papa John pizzas for 10,000 bitcoin, that’s just under $60M today...I think it’s ok to ask why there is such a jump in value, when the functionality is reproducible for nearly nothing right?
As to your point, I agree any of the coins I mentioned would gain value if adopted by the websites, but that’s the beauty of decentralizing, users don’t need permission. And if there was any doubt about the underlying concept I believe Kik just launched its own community cryptocoin, creating 10 trillion and raised $100M on an ICO selling roughly 40%.
However, it's good data regarding how much of the currency being held is put to use and how much is just hold-and-pray/FOMO.
As a supporter of bitcoin, I recognize that there's so little backing its value. Once some piece of devastating news would be released, it could send bitcoin tumbling all the way down to zero. There would not necessarily be any residual value to the currency if the news were bad enough. The only thing I could imagine that would obliterate all the value might be "algo for PoW is vulnerable to trivial double-spend, no software workaround available". The next most significant thing would be "global consensus among UN member states to outlaw cryptocurrency transactions, transactions to carry criminal penalties including imprisonment." But then it would just slip to merely black market use, which would likely preserve some residual value.
Bitcoin's power/lure is: invulnerability+deflationary+novelty+utility+ubiquity.
Invulnerability: its value will fluctuate as demand cycles, but the network will continue to churn out new transactions regardless.
Deflationary: yes, as everyone says this is a bad quality for a currency, but it helps explain why people keep investing.
Novelty: there's some things that you can do with bitcoin that you can't/couldn't ever do before.
Utility: it's a truly useful technology and there's innovation going on to find new ways to leverage it.
Ubiquity: why bitcoin and not other cryptocoins? Its marketing/brand/ubiquity is its strength. Admittedly it is not irresistibly strong. Support for some other coin could easily overtake it (and that's why there's some investors hedging on other coins).
The inherent value of any currency is based on these 5 factors.
1 scarcity - limit on supply, difficult to counterfeit
2 fungible - all coins are the same
3 divisibility - 1 / 100 millionth of a bitcoin is smallest unit. crypto is high divisible, an important feature if there is deflation.
4 durability - dollar bills get old and torn up. whereas, computers and drives crash and you can lose your private key.
5 transferability - cash and gold require physical transfer.
banking: ACH, credit cards, wire transfers have fees.
bitcoin: global internet transferability. transaction time should be less than 10 minutes. fees were low initially but have been going up due to network congestion.
However they main thing that makes a currency valuable is willingness to exchange it for goods and services. That is the useful part about the bitcoin "bubble." It serves to increase adoption of it's usage.
edit: formatting and note about losing keys mention in comment below
Regarding durability, because of cryptocurrency's distributed nature, a better parallel would be lost private keys and transactions that destroy coins rather than drive crashes.
I'm sorry, but you can't brush that subject off with a single sentence. It's a huge problem. If you want a real currency, that is.
You might hope that the free market will fix this problem, but I have my doubts. The current whales don't have a real incentive to sell.
And if Bitcoin would reach its goal, we would have some new, anonymous and untouchable overlords that would make the feudal ones look like amateurs. No thanks.
> I'm sorry, but you can't brush that subject off with a single sentence. It's a huge problem.
Sorry, I suppose I should've been clearer. Inequity is a problem, but not for bitcoin. I meant that since it doesn't (and might never) represent overall wealth that it's not very interesting how some slice of the population holds it.
> If you want a real currency, that is.
I'm okay with Bitcoin being something unlike any previous currency. I'm okay with bitcoin only being used by rich people, only being used by poor people, only being used by technophiles, or only being used by technophobes.
> And if Bitcoin would reach its goal
I doubt there's any consensus on whatever goal that might be. Bitcoin [supporters] like the idea of adoption, but I don't think many would assume it would eliminate the use or need for fiat currencies.
> ... we would have some new, anonymous and untouchable overlords that would make the feudal ones look like amateurs. No thanks.
I don't know how we got here. There's never been a more enabling technology. If in this odd analogy the "serfs" decide they don't like bitcoin they can use some-other-coin-that-they-prefer.
No, if you are taking the long view, then Dollar Cost Averaging or other strategies are recommended. This eliminates the risks involved with trying to chase the trend.
Winning what precisely? Making early speculators wealthy beyond their wildest dreams, causing extreme FOMO, while in no way effecting world policy? I’ll pass on that train wreck.
Yeah, nothing new about a permissionless digital-signature-secured decentralized currency being rapidly monetized in an age of global stagnation and quantitative easing / printing money.
So you can use this for what? Btw, I don't think you know what quantitative easing is. Explain to me why the value of USD remained strong all throughout the period of supposed money printing.
Because it hasn't fallen yet. It will. The Federal Reserve is insolvent. As the dollar falls from global usage, it can't buy all the real assets necessary to stabilize the dollar using printed money that no one wants.
For all practical purposes, it really isn't. Hyperinflation is a boogeyman used by deficit hawks and Bitcoin supporters to scare people into supporting their way of thinking without providing real arguments.
Think about it: people talk as though hyperinflation is always just around the corner, waiting to pounce at the slightest misstep. But in the last century, through all the ups and downs of the economic cycle, amounting to thousands of "country-years", how many instances of hyperinflation (other than countries totally destroyed by war) have there been? The answer is: three. Weimar Germany, Zimbabwe, and Yugoslavia. Don't you think it would be more frequent if it was really such a serious threat?
And none of those three examples are even really relevant. Germany's hyperinflation happened when we had a pre-modern grasp of monetary theory, and Zanzibar and Yugoslavia were both ruled by ignorant despots. I'm just gonna come out and say it: in a modern country with even a marginally competent central bank (which we have, whether you want to admit it or not), hyperinflation cannot happen; it is a myth.
> bank runs are real
Have there been any bank runs in the developed world in the last half-century where people actually lost their deposits? Again, a government with even the minimum amount of competence to institute deposit insurance makes it not an issue.
> Bitcoin never fails an audit
Only for a uselessly narrow definition of "Bitcoin". The protocol itself, sure, but for almost every company that actually does business in Bitcoin, it's a different story. Every Bitcoin exchange either has gone bust or will, most Bitcoin mining companies are scams that only ship once the difficulty has increased to the point where the hardware is no longer useful, etc.
What about megainflation? Or superinflation? I know the cost of medical, housing, and education has gone up an order of magnitude where I live in Los Angeles in the last 20 years.
The timescales involved are much larger, giving you ample time to spend or invest the money you have. It's only a problem if you stuff money under your mattress.
I'm not convinced. I don't think it's reasonable to expect every single person to be an investor in anything other than sensible necessities, such as education and property, in order to live a comfortable life. Quantitative easing as a mechanism for stimulating growth is nothing but theft from the non-investor class. I haven't "stuffed money under my mattress" and I'm struggling to not go into debt living in L.A. as an engineer of 20 years even though my salary is in the top 10% percentile for my experience and title. That's absurd. The house I'm renting doubled in value in the last 4 years. My income is going up slower than housing prices, so I've missed the boat, and will not be able to buy a house unless I move. Inflation has had a real and significant impact on my life.
I don't think wage stagnation has much to do with inflation. If the USD stayed steady or was deflationary, I imagine that nothing about your purchasing power would fundamentally change, the numbers would just look a little different.
The US Dollar lost half its value in my short lifetime. Most other currencies have done worse. At a time when the US Dollar is falling in significance as a global reserve currency, and a central bank holding ~$4.5 trillion in assets, you have no doubts?
I understand SHA-256 and ECC; they are easy to trust and more trustworthy than authority. Bitcoin is the most simple thing that could possibly work; and it meets "worse is better" criteria.
What backs FDIC insurance? A haircut, or printed money?
> The US Dollar lost half its value in my short lifetime. Most other currencies have done worse.
You are describing ordinary inflation, and using the word "hyperinflation" to make it sound scarier than it is. That is FUD. And "lost half its value" completely ignores the fact that nominal wages have increased at the same time. Please don't use this first-grade nonsense on Hacker News, you're talking to intelligent people here.
> At a time when the US Dollar is falling in significance as a global reserve currency, and a central bank holding ~$4.5 trillion in assets, you have no doubts?
The US dollar is falling in significance as a global reserve currency, being replaced by... the fiat currencies of other nations. How does this prove the ascendancy of Bitcoin?
> I understand SHA-256 and ECC; they are easy to trust and more trustworthy than authority.
You did not read my previous post. Bitcoin itself it perfectly fine, but it is too low-level to use for most practical transactions, you need to build layers of abstraction (futures, exchanges, wallets) on top of it. These are mostly run by companies that are either extremely shady, have terrible security, or both.
> What backs FDIC insurance? A haircut, or printed money?
A large insurance fund paid for by bank taxes, as even a few minutes of research would tell you.
There are good arguments in favor of Bitcoin, but I want you to understand that when its defenders routinely trot out the same easily-disproven cookie-cutter arguments repeated on autopilot, it becomes very easy for people not to take you seriously.
There is no such thing as a free lunch. FDIC insurance can and will fail in the largest bank run ever.
Banking is a Prisoner's Dilemma, because the first ones to escape get their cash, the middle ones deal with insurance, and the last ones lose everything.
Use always-audited Bitcoin. Readers here have an advantage of being able to understand the underlying technology.
So bet $20. Bitcoin can be upgraded to N-bits of resolution in the future - a single satoshi could provide all the liquidity needed in a universe-sized economy.
You know Bitcoin is worth it when so much cash is being dumped in Russia, India, and Eglin AFB to faction the community. The legacy powers are being turned over.
This is hardly an earth-shattering revelation. Global demand for anything can shift widely based on regulation. If China were to outlaw coal, guess what would happen to demand for coal.
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[ 1.9 ms ] story [ 18.0 ms ] threadInflation of the dollar will skyrocket and anyone who wasn't holding bitcoin is going to get fucked. How is this going to end well?
Even for the bitcoin holders. If the economy is fucked from inflation and a car costs 50 bitcoins or $50 million of Fiat dollars... that's not going to be a good time for anyone.
It's certainly better money, and will have a lower monetary inflation rate than any other national currency by 2024.
That reminds me of a story from the dot-com boom, about an investor who knew it was time to get out when a grocery store clerk asked how to get in.
My friend who is all over Bitcoin, yet is technology inept, used one of these
It's a piece of software running a database/blockchain. There's now several hundred blockchain service networks up and running.
Why should anyone pay more than a few cents for a bitcoin or database-backed-blockchain-token where the supply was produced for minimal effort and is now being artificially inflated by unregulated exchanges suckering in people who don't know what they're buying?
Maybe blockchains will someday be efficent, but as they stand the only proven use case is speculation due to psychological assumption that the supply is limited .
[1] via https://news.ycombinator.com/user?id=davidgerardGold is quite a good comparison to bitcoin. Gold has very little "intrinsic" value and isn't backed up by the government.
Additionally the shiny metal is limited in supply, that is there is a finite amount and you nor I are going to make anymore of it. As OP suggested bitcoin is manmade, it may be artificially limited (21M coins) but anyone can just create a new blockchain and/or cryptocoin for next to nothing.
I myself learned how to create smart contracts and deploy them on the Ethereum blockchain and I have created YC Coin; Reddit Coin; Facebook Coin and Instagram Coin. For just a few fractions of an Ethereum Coin I have decentralized karma and likes across networks with billions of users combined. Separately, I have created tokens backed by real life assets allowing users to buy/sell/trade interest in actual assets on exchanges.
I’ve even begun offering coin/token creation as a service so anyone or any business who wants it’s own community cryptocoin can have one. Now I don’t question why my coins/tokens are worth less than bitcoin, but at the end of the day “why is bitcoin worth more than other coins when they are both artificially finite stores of value functioning on immutable blockchain technologies, providing the same functions” is a fair question. Once precious metals can be reproduced for next to nothing, like blockchains and cryptocoins, then it’s fair to challenge their worth until then I think it’s easy to argue their worth as a store of value.
A store of value is, of course, useful, but that doesn’t mean that it should gain a high price. Is there a shortage of value storage, or are there already plenty of ways to store value?
It's not rare, and the supply was minted for substantially minimal energy/capital input. Satoshi designed an economic model for Bitcoin to reward himself and the small pool of users who ran the software. Anyone buying a Bitcoin for more than it cost to produce it in 2009-2014 is hoping they'll find a greater fool to sell their coin to.
Is litecoin a store of value? Monero a store of value too? Maybe 42 coin is more valuable because there's only 42 instead of "21 million"... oops the network forked and now there's twice... wait four times... wait the network forked again... oh dear.
I don't agree with any of that.
I suppose the internet is really just a bunch of 1s and 0s and not of any value either using that reasoning.
Also, I’d be the first person to acknowledge and promote the function of bitcoin and blockchain technologies too, but I think it’s ok to support bitcoin/blockchain while simultaneously questioning how the monetary value of bitcoin is derived and drawing a distinction between value/worth/function of precious metals and cryptocurrencies. It’s like smart contracts, I’m the first to support and promote self executing programs hosted on blockchains, but I’m also the first to challenge when people market them as functioning outside the legal system or in other ways inconsistent with reality.
I say if you can, own a little of all of them, sheep too. After all gold is only worth something until it’s worth less than a can of soup.
... and I can take my shiny metal (gold) and mould it into a replica spanish gold ingot, it doesn't mean my gold bar is worth the same as the original in fact it's worth substantially less.
By creating YC Coin, Reddit Coin or Facebook coin you're not increasing the supply of the original Bitcoin you're creating a replica of the original.
In fact, by creating the vast array of coins you have you're actually demonstrating why none of them have value, they're a dime a dozen and none of them are the original bitcoin. But a 'KarmaCoin' adopted by those websites might have substantially more value (but good luck with that!).
As to your point, I agree any of the coins I mentioned would gain value if adopted by the websites, but that’s the beauty of decentralizing, users don’t need permission. And if there was any doubt about the underlying concept I believe Kik just launched its own community cryptocoin, creating 10 trillion and raised $100M on an ICO selling roughly 40%.
A blockchain is not a database - you're just trolling.
However, it's good data regarding how much of the currency being held is put to use and how much is just hold-and-pray/FOMO.
As a supporter of bitcoin, I recognize that there's so little backing its value. Once some piece of devastating news would be released, it could send bitcoin tumbling all the way down to zero. There would not necessarily be any residual value to the currency if the news were bad enough. The only thing I could imagine that would obliterate all the value might be "algo for PoW is vulnerable to trivial double-spend, no software workaround available". The next most significant thing would be "global consensus among UN member states to outlaw cryptocurrency transactions, transactions to carry criminal penalties including imprisonment." But then it would just slip to merely black market use, which would likely preserve some residual value.
Bitcoin's power/lure is: invulnerability+deflationary+novelty+utility+ubiquity.
Invulnerability: its value will fluctuate as demand cycles, but the network will continue to churn out new transactions regardless.
Deflationary: yes, as everyone says this is a bad quality for a currency, but it helps explain why people keep investing.
Novelty: there's some things that you can do with bitcoin that you can't/couldn't ever do before.
Utility: it's a truly useful technology and there's innovation going on to find new ways to leverage it.
Ubiquity: why bitcoin and not other cryptocoins? Its marketing/brand/ubiquity is its strength. Admittedly it is not irresistibly strong. Support for some other coin could easily overtake it (and that's why there's some investors hedging on other coins).
You can do the same things with a variety of other cryptocurrencies for a fraction of the cost, though.. and it will usually be a lot faster, too.
What exactly is backing its value? Is it just marketing fluff?
1 scarcity - limit on supply, difficult to counterfeit
2 fungible - all coins are the same
3 divisibility - 1 / 100 millionth of a bitcoin is smallest unit. crypto is high divisible, an important feature if there is deflation.
4 durability - dollar bills get old and torn up. whereas, computers and drives crash and you can lose your private key.
5 transferability - cash and gold require physical transfer. banking: ACH, credit cards, wire transfers have fees. bitcoin: global internet transferability. transaction time should be less than 10 minutes. fees were low initially but have been going up due to network congestion.
However they main thing that makes a currency valuable is willingness to exchange it for goods and services. That is the useful part about the bitcoin "bubble." It serves to increase adoption of it's usage.
edit: formatting and note about losing keys mention in comment below
I'm sorry, but you can't brush that subject off with a single sentence. It's a huge problem. If you want a real currency, that is.
You might hope that the free market will fix this problem, but I have my doubts. The current whales don't have a real incentive to sell.
And if Bitcoin would reach its goal, we would have some new, anonymous and untouchable overlords that would make the feudal ones look like amateurs. No thanks.
Sorry, I suppose I should've been clearer. Inequity is a problem, but not for bitcoin. I meant that since it doesn't (and might never) represent overall wealth that it's not very interesting how some slice of the population holds it.
> If you want a real currency, that is.
I'm okay with Bitcoin being something unlike any previous currency. I'm okay with bitcoin only being used by rich people, only being used by poor people, only being used by technophiles, or only being used by technophobes.
> And if Bitcoin would reach its goal
I doubt there's any consensus on whatever goal that might be. Bitcoin [supporters] like the idea of adoption, but I don't think many would assume it would eliminate the use or need for fiat currencies.
> ... we would have some new, anonymous and untouchable overlords that would make the feudal ones look like amateurs. No thanks.
I don't know how we got here. There's never been a more enabling technology. If in this odd analogy the "serfs" decide they don't like bitcoin they can use some-other-coin-that-they-prefer.
This is why Bitcoin is winning.
For all practical purposes, it really isn't. Hyperinflation is a boogeyman used by deficit hawks and Bitcoin supporters to scare people into supporting their way of thinking without providing real arguments.
Think about it: people talk as though hyperinflation is always just around the corner, waiting to pounce at the slightest misstep. But in the last century, through all the ups and downs of the economic cycle, amounting to thousands of "country-years", how many instances of hyperinflation (other than countries totally destroyed by war) have there been? The answer is: three. Weimar Germany, Zimbabwe, and Yugoslavia. Don't you think it would be more frequent if it was really such a serious threat?
And none of those three examples are even really relevant. Germany's hyperinflation happened when we had a pre-modern grasp of monetary theory, and Zanzibar and Yugoslavia were both ruled by ignorant despots. I'm just gonna come out and say it: in a modern country with even a marginally competent central bank (which we have, whether you want to admit it or not), hyperinflation cannot happen; it is a myth.
> bank runs are real
Have there been any bank runs in the developed world in the last half-century where people actually lost their deposits? Again, a government with even the minimum amount of competence to institute deposit insurance makes it not an issue.
> Bitcoin never fails an audit
Only for a uselessly narrow definition of "Bitcoin". The protocol itself, sure, but for almost every company that actually does business in Bitcoin, it's a different story. Every Bitcoin exchange either has gone bust or will, most Bitcoin mining companies are scams that only ship once the difficulty has increased to the point where the hardware is no longer useful, etc.
I understand SHA-256 and ECC; they are easy to trust and more trustworthy than authority. Bitcoin is the most simple thing that could possibly work; and it meets "worse is better" criteria.
What backs FDIC insurance? A haircut, or printed money?
You are describing ordinary inflation, and using the word "hyperinflation" to make it sound scarier than it is. That is FUD. And "lost half its value" completely ignores the fact that nominal wages have increased at the same time. Please don't use this first-grade nonsense on Hacker News, you're talking to intelligent people here.
> At a time when the US Dollar is falling in significance as a global reserve currency, and a central bank holding ~$4.5 trillion in assets, you have no doubts?
The US dollar is falling in significance as a global reserve currency, being replaced by... the fiat currencies of other nations. How does this prove the ascendancy of Bitcoin?
> I understand SHA-256 and ECC; they are easy to trust and more trustworthy than authority.
You did not read my previous post. Bitcoin itself it perfectly fine, but it is too low-level to use for most practical transactions, you need to build layers of abstraction (futures, exchanges, wallets) on top of it. These are mostly run by companies that are either extremely shady, have terrible security, or both.
> What backs FDIC insurance? A haircut, or printed money?
A large insurance fund paid for by bank taxes, as even a few minutes of research would tell you.
There are good arguments in favor of Bitcoin, but I want you to understand that when its defenders routinely trot out the same easily-disproven cookie-cutter arguments repeated on autopilot, it becomes very easy for people not to take you seriously.
Banking is a Prisoner's Dilemma, because the first ones to escape get their cash, the middle ones deal with insurance, and the last ones lose everything.
Use always-audited Bitcoin. Readers here have an advantage of being able to understand the underlying technology.
Venezuela would like to have a word.
at $5k each you're risking a lot so your advice applies. When it's in the penny /dollar range you can gamble a bit, win or lose.
They were also part of influential group pumping bitcoins, and before that were in the penny/pink stocks pump and dump schemes.
Alot of them cashed out of Bitcoin forshadowing the potential demise as per meetings in china regarding its future in the country.
Alot of them have moved on to next popular coins to move their funds, and avoid taxes transfering money out of china