Originally published at: https://boingboing.net/2020/11/30/bitcoin-price-sets-new-record-19850.html
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I wonder what percentage of investors will ever use Bitcoin to actually purchase any goods or services? Less than 10%? Less than 5%? Less than 1%?
There are a lot of absurd financial instruments at play in our investor economy, but not many as absurd on such a basic level as Bitcoin. (this isn’t to say that some people won’t make a shit ton of money on it, because they definitely will–such is the way with all speculation)
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The street found its use for Bitcoin, and it’s not for buying comic books (as I did in 2016).
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Maybe, but we don’t really know that yet, do we? The problem seems to be finding people to give you real currency for it. There are a lot of people mining it, buying it, and trading it, but has anyone sold a large quantity of it and made any money? Bitcoin is like stock with no company behind it. Nothing to give it an external source of value. I remain unconvinced that you could cash out when you wanted to.
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But. The article that is referenced specifically says that people cashed out today at the highest level in history.
There are numerous exchanges to buy and sell Bitcoin on. If you set up an account to buy, you can easily sell.
Easily sell is a strong term - there’s been a bunch of times that people have seen crazy wait times or cancellations from big bitcoin investment exchanges like CoinBase/etc.
I don’t dispute that it’s possible and happens, it just often isn’t as simple as you’re saying, especially if you’re trying to sell a bunch at once.
Edit: It looks like this got a lot better in the last few years as Bitcoin was no longer in freefall, so possible some of these exchanges have the money to handle it now.
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I mined about $10 of bitcoin in around 2014 over about two months and then stopped because my office was getting too hot from running my video card all day and night. It was summer and I was sick of the extra heat and paying the high electric bills from running everything full tilt. I haven’t touched the bitcoin since. Now, that $10 is worth a whopping $138. LOL. Maybe I should have kept going instead of being such a weakling.
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What could possibly go wrong with a system of currency that you can’t see, can’t touch, and is held anonymously in places you can’t physically access, and run by strangers who you can never meet?
Plenty of people will make money speculating on it, and plenty more will lose their freaking shirts.
Good luck!
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That is a valid point. In the 2017 ATH, there were reports of many-day transaction times.
Never used Coinbase (and never will) but they are also known to be about the worst with outages (in addition to how they treat minorities).
If we accept that it’s more like holding stocks or gold then the transaction times aren’t as bad. Don’t have to deal with market hours, don’t have to physically carry gold to a pawn shop or deal with custodian. As with any asset, the difficulty of selling scales with the size of position held.
I wasn’t really paying attention during the 2017 bull run, but my understanding is part of the reason the price went exponential is that people couldn’t transfer to exchanges due to the transactional issues. So there was an artificial supply shortage in addition the halving effect.
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The US Federal Reserve?
Or are we talking about how the US government hasn’t audited their gold reserves since 1974?
The Bitcoin community’s unofficial motto is “Hodl”, a play on the word “hold”. They’re basically speculators who buy in and hope to cash out later at a time like this (at least before too many others also cash out and drive down the price).
These are the kinds of people who thought entrusting their wealth to a Web exchange that previously traded in Magic: The Gathering cards was a good idea. Make of that what you will.
I put a miner on a spare work server when I first heard about it in 2011, mostly out of idle curiosity. At a certain point I lost interest and forgot about it. When I got interested again a few years later I found that the machine has been de-commissioned and sold. Oh well.
No, I just opened my wallet and can see the currency, can touch it, and can hold anonymously in a place I can physically access (as long as I don’t care about accruing interest on it, but beyond speculative value you’re not getting any interest on BTC, either). If I spend it for goods or service (as is the case with physical cash), I do it with almost zero latency. It’s issued by strangers I’ll never meet but who are accountable to me through their role as government officials, and held/managed by bankers who are discouraged from running away with it by the law as well as by the “free” market. That it’s fiat currency instead of gold-backed doesn’t change any of that (and as a bonus, it doesn’t have built-in deflation).
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Sure, whatevs! You speculate with Bitcoin, and I’ll go with the full faith and credit of the United States Government. We may both be wrong, but I like my chances.
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Uh, oh, that’s a big problem, considering that the only reason the dollar has any value is because is backed by physical gold reserves. Right?
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After this administration it might be wise to put eyes on whatever bars are left.
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Haha. Yes, exactly. Despite a lack of accounting of the assets of the Fed, it’s good that the dollar is backed by Gold, so that we can’t just inflate the US dollar supply by 22% in a year at 0% interest and expect no adverse effects!
If we had a nickel every time gold bugs and bitcoin…enthusiasts, let’s call them…told us all how the terrible specter of inflation was JUST AROUND THE CORNER THIS TIME FOR REAL, we could take a good sized bite out of the debt.
But in order to play along, could you tell me what you suspect an audit of the gold reserves would reveal?
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I ha a business partner a few years ago who got really committed to Bitcoin (and Ethereum). It paralleled with our business falling apart (I got tired of doing everything so left).
He was given some $ by his wealthy father to ‘invest’ in Bitcoin. He then ‘made’ a lot of money, some of which he has cashed out (bought a house for his ex so the kids would have a home). He did manage to transform from centrist to hard right antitaxer almost exactly when he realized he had a bunch of free money he didn’t want to pay taxes on.
Suffice it to say we aren’t that close anymore.
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After digging through a couple of pages of goldbug nuttiness I found this summary of the conspiracy theory from this bastion of the financial establishment:
The Russians are also pushing the claim that U.S. gold is of debased purity, which is why the audits (that happen regularly) are supposedly never conducted.
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My comment was regarding to the shadowy specter of bitcoin bandits. Don’t know who runs it, can’t touch it, etc.
I was relating that to the Fed, and the assets that back the dollar. “Dollar isn’t back by Gold, it’s backed by the capability of the US government to pay it’s debts… and they haven’t audited their collateral since 1974”.
There’s reason to suggest that the dollar has been deflationary for 20-30 years (iPhone prices, yadda yadda), due to automation. It’s not my field of expertise, but the Fed buying corporate bonds is an experiment that I will hedge against.
If you believe that our gold reserves are the “collateral” for public debt, I’m not sure we have the same understanding of how the economy works.
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