Two different unrelated comments, hence your quote between
The earth, its resources and (fiat) money supply are finite.
This curve won’t be sustainable forever.
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I think the demand for crypto trading is finite too - and there’s no other demand for this tech, so eventually, this will flat out or even revert to the mean. Unless a miracle happens and people start actually using cryptos instead of just trading them.
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Very good points you made. I have two thoughts:
a) At this point, BTC is not meant to make payments. It is like the crypto gold. You don’t pay in gold coins or jewels, yet until some years ago economies as big as the US one were tied to it. That is its main purpose and also of transfer big sums of money quickly. It certainly takes less than a SEPA/SWIFT transfer.
b) Once we start to see central bank digital currencies imposed into us, the true value of cryptocurrencies will start to flourish. And then, again, BTC could serve as the gold standard.
Price wise I don’t know where is it going to go, my guess is up but I don’t really know, nobody does.
But cryptos are here to stay in one way or another.
IMHO.
I’m skeptical about this - gold standard was not installed out of the blue as a monetary standard. It took hundreds of years for gold to win the competition with other monies. Gold has many inherent values that no other money has and on top of that it’s actually used in industry, jewelry, etc.
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It would be interesting to see how much money was on the dot-com bubble and how much money is now in the crypto.
Also in terms of engineers/users involved in both, how does it compare.
I do not believe crypto will ever be able to compete with fiat or gold. It will gradually lose popularity and disappear or, at best, stay a small niche. However, I do find it incredibly exciting what crypto does to people. Imagine all the scientific insights we can gain from this hype, not only financially, but also psychologically. So I actually do see LOADS of value in crypto 
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One more thing about volatility. Look at what companies which accept Bitcoin payments are actually doing with them. They immediately sell them. Why? Because you don’t want to hold money that can lose anytime 90% of value - that could basically kill a company. In other words it’s economically irrational to switch from dollars to Bitcoin.
That’s the difference between BTC and gold, and that why gold used to be a monetary standard and Bitcoin most likely will never be.
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First fiat supply is limited, it can only increase within scope that makes inflation sustainable for the economy - if inflation becomes too high, then the money is abandoned as store of value by society (e.g. Zimbabwean dollar) - and even before that happens in democratic societies you have rising pressure on government to do something to curb inflation. Secondly, the relationship between dollar and Bitcoin is not that mechanical because the price is not only determined by supply but also by demand. If the demand fades away, it doesn’t matter how restricted the supply is.
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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.