The true value of central bank digital currencies is that it will allow central banks (and probably the government) to know everything about all/most our transactions. CBDC are, by design, centralized, so don’t benefit from the decentralisation cryptos originally aimed to bring. They’re on the blockchain, still, though, so on an impermanent ledger. It is a dream for most governments, though I don’t see what a crypto enthusiast would find not totally dreadful in them. They’re fiat money on steroids.
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Are you telling me the resources are scarce and are finite therefore it must be valuable?
It just seems like any resource on earth is bitcoin with extra steps?
Ah no, maybe its the inverse?
One more thing.
In terms of inflation - this year Bitcoin lost 60% of its value already and USD will lose about 9% at the end of the year. And for comparison, Swiss francs will lose about 3.5% at the end of the year. For a store of value, it makes much more sense to use Swiss francs. And for past returns, you can’t really count on them because, in finance, everything eventually reverses to the mean. I think you need to be prepared for more modest, less-hype-driven, reasonable returns.
In any case - all existing fiat currencies are less volatile than Bitcoin. I believe that the Gold standard or some reasonable, anti-inflation central banking system (like Milton Friedman’s money supply fixed growth rate rule or Scott Sumner’s NGDP targeting) would be probably even better (yes, I’m anti-Keynesian), but we have what we have, and Bitcoin is not an improvement to existing currencies. As a payment system, CreditCard/Twint/Revolut/PayPal/etc are probably more convenient and faster alternatives (at least that’s my personal impression and that’s what everybody seems to be using). Bitcoin is also useless as a unit of account - running a company and pricing goods and services in Bitcoin would be ridiculous and dangerous - you would have to change prices every day, sometimes even by 80%, and getting income that can melt by 80% can potentially kill a company. To sum up: Bitcoin is not money - it’s a speculative asset and a trading platform. People are using it to gamble - not to pay for bread.
In fact, I think the biggest hope for Bitcoin is that it will go to almost zero and it will wipe out the whole trading/gambling industry that is built on top of it. Then it could start from scratch as money for criminals and unbanked people in 3rd world countries and anti-bank and anti-government libertarians/anarchists. From there it could develop into something useful if the price was stable, payments were fast and easy, and there was a higher level of trust in the system than in banks (that last one probably will never happen because there’s no insurance for bitcoin deposits like in case of banks and brokers and there’s no central bank as a lender of last resort to protect lending in bitcoin).
As a libertarian anarchist and Austrian economics fanboy, I really would love to see private, non-government money replacing national currencies, but as a financial-economical realist, I tell you what I see and what I think about it - it’s not usable for this purpose and I can hardly see how it can become usable.
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I announce the bottom of this cycle should be reached at 12’500$
Let’s check facts instead of opinion on Bitcoin’s strengthening network, since May 2021:
- Bitcoin core nodes have grown +50%
- Lightning network capacity has grown +300%
Some other data points:
- Hashrate at ATH
- DCA for addresses below 1 btc at ATH
- total # addresses has crossed 1’000’000’000
Edit: I forgot to add that 64% of the btc did not move for the past 12 months, which is also a ATH and completely contradicts the “gambling” nonsense I am reading here. It is a formidable store of value and more and more people understand that.
Cost of production is estimated to be $13k at the moment, so why not
I’ve got the information that 90% of Bitcoin transactions is trading/gambling from Ben Felix’s podcasts with Eugene Fama:
A paper came out recently that found that I think 90% of Bitcoin transactions are not economically meaningful.
Formidable store of value that loses 60% of value in 3 months. I think we have different definitions of the store of value - in my world my store of value wouldn’t indicate one day that I’m rich and the next day that I’m broke.
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Bitcoins can change hands without being sent around. And at least in exchange hot wallets that happens a lot.
“The true value” for them, the stablishment. Not for us the citizens. They will know everything about us and have absolute power about our entire life. CBDC’s with cash banning (it will happen also) is the dictators dream. Where China is heading to btw. One click in a computer, and you are cut-off from all your funds.
Dreadful about what? The blockchain? It is not so difficult to protect yourself from the impermanency of the blockchain with BTC : Mixers, Tor, DEX’s, etc.
And with cryptos like Monero that is even easier.
I am very glad these things exists for if the time comes, we’ll be ready.
Don’t forget we live in a bubble called Switzerland with direct democracy, fair justice and tax system, etc. but the majority of the world is very different.
My opinion.
If you live and plan to stay in switzerland for as long as you want that “store of value” to be any useful.
Not many years ago CHF was shit compared to EUR (0.83 IIRC).
You are making exactly my point and I don’t understand how you pretend to turn it around: CBDC’s are a dictator’s dream and they are not a plus for a believer of blockchain as a decentralized mean of exchange.
A believer in cryptos as a mean to get rich quick scheme should think twice about the implications of having governments jump in with CBDC’s before considering it a plus and pushing for it as a means for their favourite crypto to get to the moon harder, better, faster and stronger.
Hah! I think we are not understanding each other. What I am saying is that crypto has nothing to do with CDBC’s in terms of anonymity/freedom. The blockchain registering all past transactions is not a big issue, it can still be completely anonymous if you wish so. CDBC’s the opposite, 100% traceable and impossible to deidentify from your real identity.
Finite is probably the wrong choice of word, especially for currencies, @1000000CHF wording of „limited“ more appropriate.
That said, there is and will be a limited amount of money that’s being exchanged for (demand of) Bitcoin. Unless… Bitcoin itself becomes a primary currency of trade. Which it couldn’t be farther from, unless you look at criminals and a few „shithole countries“ around the world.
Should you underestimate the creativity of developing nation to come up with (also unorthodox) solutions to their everyday issues? Definitely not.
But one crypto punk president in Middle America isn‘t going to drive the worldwide adoption of Bitcoin.
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Alright, I understand what your position is and had misunderstood it at first. I highly doubt it would/will really play that way but I’ll respect the effort/belief.
A paper found that I think 
do you have more science like that? I check directly on chain…
Exchange wallets are well identified and usually excluded from this analysis, actually it does not “change hands” most of the time within an exchange, that’s why most don’t allow user to user transfer (like kraken and Binance I think)
I trust more him than you but even if he’s wrong - it doesn’t matter because Bitcoin is still not usable as money due to volatility and there’s nothing that can fix it. End of the story.
But that’s the whole point of Bitcoin, you don’t need to trust me, or a journalist, an economist or a government. You verify everything directly on chain. All my data are from the chain directly. You can interpret the data differently, but the data is correct.
That should be a game changer for someone like you who claims to be libertarian.
Download a wallet that supports the lightning network and I send you $1 directly from my node, and then we discuss how this is not magical internet money
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Why do propose 1 USD and not a (fraction of) BTC?
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