Seattle
Valued Senior Member
Fiat currency isn't tied to anything. Even if our currency was backed by gold, there is nothing intrinsic about gold either. It's a shiny metal. Tying a currency to it simply serves to prevent a government from unlimited spending since gold itself is limited. Otherwise there would be no point. It also hasn't proved to be doable, long-term, for the obvious reasons.
Bitcoin is limited to 21 million coins. The U.S. Dollar isn't limited at all. At some point other countries could stop accepting payment in dollars if the purchasing power of the dollar continues to be debased by unlimited spending.
We have an advantage since we are the largest economy and since the dollar, at the moment, is the de facto world reserve currency. That's because oil purchases have to be settled in dollars.
Australia, for instance has a public debt to GDP ratio about about 63%, meaning that public (national) debt is about 63% of your GDP. The ratio for the U.S. is about 124%, meaning that our debt is more than our GDP. At what point do people simple refuse to accept payment in dollars? At some point its purchasing power will be reduced to the point that people no longer want the dollar.
That doesn't affect Bitcoin, its value can't be debased by an irresponsible governments spending policy. Before it got to the point where no one wanted U.S. government debt, the Treasury would have to raise interests higher and higher to make U.S. debt instruments more appealing. Just like corporate junk bonds. You can imagine that this is just a spiraling problem at that point.
The value of everything is controlled by supply and demand. With greater acceptance there is more demand for Bitcoin. The supply is limited so the price goes up.
Sure the price goes up and down in the short-run, just like anything else. Over the longer term Bitcoin has been a good investment. With greater adoption that volatility should go down and potential returns should increase at a slower rate. That's the price of greater stability.
What is so special about Bitcoin compared to other cryptos? Its supply is limited, it's decentralized, it's super secure which is why it uses the proof of work concept.
No one is arguing that trading only results in nothing but "winning". The same would apply to gold, diamonds and any other trading including stocks and real estate.
All money is creating something out of nothing including the money you use and rely on.
A strength of Bitcoin is that it isn't a tangible asset. It's a digital asset. You can convert your wealth to a form that can be transmitted via the internet without "trusting" any centralized 3rd parties. There is no one that can confiscate your asset. I have said nothing, one way or the other about Bitcoin being "safe" in any way that you are using that term.
You keep deriding "clever" traders, "group think", etc. In fact you are behaving, in part, in the same way that you lecture MR about which is either "playing dumb" or refusing to educate yourself on the basics before making overly opinionated statements about a subject that you haven't spent much time attempting to educate yourself about.
I'll lump these two together because I'm feeling lazy. Store of value means that if you put your money into something and sell it in 10, 20 years, inflation hasn't eroded its value. People buy real estate and stocks because they can't just put their money in the bank. After some period of time it would be virtually worthless were they to do that.
There are no "guarantees" with anything. Your fiat money is pretty much guaranteed to lose value however.
Metcalf's Law is the answer to your second point. Not in the engineering sense but it has also come to refer to the value that networking adds to something. It's why you would pay more to own Facebook than to own a newly created "Mediabook".
You keep talking about "at least something has some intrinsic use"... You just don't understand, apparently, the utility of Bitcoin and it's beginning to look like you don't want to understand.
I don't have any comment about "young people handing their personal data to China"?
Regarding Bitcoin vs other crypto, I don't have much to say about other crypto and certainly not about the problems with keeping crypto on exchanges. Other crypto is more like a security and Bitcoin is more like a commodity.
The benefits of Bitcoin as a way to store your long-term wealth are that it was specifically designed for this. It's decentralized, limited to 21 million coins, isn't eaten up by inflation or debased by government policy and it's a way to move wealth via the internet. There really isn't another asset class, currently, that does all this.
You can't get on a plane and take your real estate with you, you aren't likely to get on a plane with all of your bars of gold, inflation won't eat up all of your wealth over time. Even a "low" rate of 2% inflation will do that. Even owning a business (or stock) isn't likely to be a good choice in 100 years from now. Few businesses are even around and viable that long.
It's not a guaranteed source of wealth, nothing is. If you wanted to transfer wealth and have it still be there in a 100 years, I can't think of a better choice. Depending on where you live, it can have even more obvious benefits.
Given its current early adoption state, it does require some patience and knowledge of why you are buying it and if you don't have that knowledge (or patience) then it's not a good choice as ignorance, in general, isn't a good choice, IMO.
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