- cross-posted to:
- bitcoin@discuss.tchncs.de
- cross-posted to:
- bitcoin@discuss.tchncs.de
cross-posted from: https://discuss.tchncs.de/post/8010617
Lol, hilarious article. They still hate bitcoin but can’t deny its use any more.
Many feel instinctive revulsion when they spy a roach. But in spite of their flaws, the bugs have uses—they turn decaying matter into nutrients and eat other pests, such as mosquitoes. Crypto has its uses, too, such as portfolio diversification and keeping money safe under despotic regimes. And, as has been shown, it is just about impossible to kill.
I don’t get bitcoin. It’s supposed to be a currency, right? But with that kind of volatility who in their right mind would use it as such?
Then its other use is speculation. A pointless activity that’s basically just gambling. You invest in something that’s not backed by anything (other than copious amounts of energy wasted). I just don’t get it…
Please, enlighten me.
Bitcoin is not primarily a currency used for buying stuff. It’s highest purpose is a store of value, and that is extremely important. Gold was the same, but you can’t go around buying gold bars, certainly not arbitrary fractions of them.
Speaking of gold, it used to be what “backed” fiat currency, but that ended 50 years ago. Because the dollar is no longer linked to the value of gold, it is easy to a nation to print more money “out of thin air” to pay their loans and costs. The problem with this is that YOUR money is now worth less than before. The federal reserve has created literally trillions of dollars in the past few years - an insane amount.
Let’s take an example with simple numbers:
Let’s say the country’s entire value used to be one million dollars, so one specific part (your groceries) is worth a hundred dollars. You have a thousand in the bank, so you can buy ten carts full.
They now print another million, yay cool, we have more money. But the country still has the same basic value, which is now two million. That means, the part you just bought, now costs two hundred dollars. This also means that the thousand dollars in your bank account is now worth less: you can only buy five carts of groceries. Welcome to inflation! What did you do to deserve that your hard-earned money is worth less??
Now, why is Bitcoin so great? Because nobody can do that stupid magic trick. There are only so many coins, and the math doesn’t care about politics.
If you have a bitcoin, you have one bitcoin, out of a total 21 million. It will always be exactly one twenty-one-millionth of the entirety. Unlike the dollars in your account.
No government can devalue it, or control it. It is yours, outside of their control. Unlike the dollars in your account.
No problem. If you like your current money and see no need for something else, you don’t need bitcoin.
I see a need for something else because fiat money, the modern money we use since only the 70s is a scam. When the western countries colonized Africa in some parts glass beads were used as money. With their advanced technology the western nations could simply produce tons of glass beads and buy everything they wanted. Modern banking is exactly the same, they create money out of thin air, and they’ll tell you that’s a good thing and necessary to “make the economy work”. I’m opting out of this system with bitcoin.
Sure, all currency is somewhat of a “scam”. But it’s also backed by various nations production and military. Bitcoin is not.
“Backed by” is a meaningless fantasy, nothing is backed by anything, nothing has “intrinsic” value. Humans value things that are useful to them, and people obviously value bitcoin, currently at around 40k per coin. You don’t think bitcoin has value, and that’s fair, like I said. Just don’t use it.
My mother in law has never been a particulerly good font of wisdom, but early in my marriage when we were visiting estate sales and antique stores for furniture, I called and asked her advice about a table. When I asked her whether she thought it was worth the price, she said, “it’s worth whatever someone is willing to pay for it.” It’s probably the most true thing I’ve ever heard, in the context of capitalism.
A huge military and large nuclear stockpile hasn’t sustained the Russian economy, or prevented it’s steady collapse.
The volatility is dampened as more people start using it, including using it as an investment. Dampened volatility makes it a worse investment, but a better currency. If you analyze Bitcoin’s price history, you’ll see that it used to be more volatile than it currently is. This trend is likely to continue, barring some sort of catastrophic failure of the system.
Bitcoin just like gold and silver are alternatives to the fiat money that we are forced to use by the government. Fiat works fairly well in many developed countries. But it can also go very wrong, just look at Zimbabwe, Venezuela, Argentina, etc. inflation. On those countries it is practically impossible to build wealth. The long term hope is for Bitcoin or some other crypto to work as a hedge against inflation.
fi·at mon·ey /ˈfēət,ˈfēˌät ˈmənē/ noun inconvertible paper money made legal tender by a government decree.