Bitcoin might become a popular medium-of-exchange once the market cap gets super high (tens of trillions of dollars), slowing down volatility. USD works for now.
I don’t think hundreds of millions are using bitcoin yet. Considering unique addresses, bitcoin usually stores each output in a new change address. Most users have dozens of addresses (or at least they should for privacy reasons). Coinbase as a public company is the only exchange reliably reporting number of users. My point: bitcoin is not new but it’s still very early in the adoption cycle :) Cheers. Keep up the trillionaire energy from lunch money days!!
"In order for any asset to become electronic cash, it must first become a store of value".
I agree with the premise of your article, but could you elaborate on the above? Why do you think this is the case? It seems that, at least historically, money has worked the other way around. As soon as an asset is seen as a store of value (e.g. gold) it was immediately discarded as a medium of exchange (e.g. gold).
I believe the there will be a rising use of the lightning network in medium-of-exchange, but not necessarily with BTC. Apps like Strike (and believe Block is working on something similar) will be able to use fiat over the lightning network by converting fiat into BTC, sending and instantly converting back into fiat. Believe this will gain serious traction over the next 5-7 years both from a peer-to-peer and business transactions.
Here in the Netherlands we did a similar experiment with tulip bulbs. It’s all fun and games as long as there is someone lined up to take over your ‘store of value’ and exchange it for an actual hard currency at that point in the future you need to liquidate. In the meantime you need to keep a close eye to two things:
1. The number of new recruits that are buying into your economic thesis. After all, the value goes up if more people chase the limited number of coins.
2. Make sure that the people who hold the bulbs keep them off the market so to ensure there’s limited supply and thus value. You need to sell before they do.
Pff 3 years! Don’t underestimate us. We’re HODLing these things until we refined the sales pitch.
All madness aside, unlike bitcoin, you can actually apply a sensible monetary policy to bulbs in the context of a growing economy. Simply by increasing the number of bulbs as the economy is expanding you are able to maintain stability to the perceived value of this means of exchange. Such stability increases trust which forms the basis for the exchange of goods and services.
What we need for a stable currency can never be offered by bitcoin simply because it is designed to be limited in supply. Our economy is not! A look at the conclusion of this article by Pomp proves this - he mentions to not use this means of exchange anytime soon simply because it apparently has to increase in value. How’s that for a currency!? A means of exchange that’s not used as such because it’s perpetually perceived to be mispriced…
Now, whether we currently have an appropriate policy in place to ensure stability of our hard currencies is open for debate and I fully understand if you wish to hedge against this. But I would make the case that there are better vehicles to do so aside from digital coins.
What all these smart people here need to spend their energy on instead is to just focus on the big things that determine whether we can keep growing the pie: ensuring peace & stability, ability of goods and people to move freely and keep removing the friction that limit this, a rules based international order, containment of WMD’s and socialism… to name a few.
If you have taken care of these big things (most are in place btw so it’s mostly making sure not to blow it) it’s almost guaranteed that the pie will continue to grow. The best hedge then, against an inflating currency, is to own a piece of this growing pie.
I can assure you that in the future I’ll not be offering you any useful currency in exchange of a speculative digital coin. But if you offer me a piece of ownership in the economy, I’ll assess whatever that piece is producing in terms of usefull hard currency(!) at that time and will offer you the fair price for that. Paid in the same usefull currency you’ll be, ironically, looking for at that time.
Agree with you about store of value. And bitcoin is certainly the cleanest most direct antidote to currency debasement, whether it’s the slower debasement strategies in developed countries, or rapid debasement in lesser developed countries. Bitcoin is the best antidote.
It does seem that bitcoin as a medium of exchange is much greater if transactions are relatively large. For some people that means tens of thousands of dollars, and for others it means tens of millions of dollars.
Bitcoin is like Adam in the Bible. He needs a partner. Silver has been money for millennia, and manipulated since the great Silver crime of 1873. Silver could very well be the Eve equivalent for Bitcoin. It's clear that there is far more Gold in the world than anyone would care to admit (just read about Yamashita's Gold in the book Gold Warriors by Sterling Seagrave). Or if you believe in conspiracy theories such as the gold hidden in the Grand canyon. Although not approvable, there are enough stories pumped out like a Tom Clancy novel (more truth than fiction just disguised), that it's clear the phrase "roads paved with gold" may very well play out that way, somewhere in the world, someday! You do not hear the same things about silver. But we know for a fact that there is around 500 oz of Silver in your standard tomahawk cruise missile!
Bitcoin and Silver, a match made in heaven - if the community figures out how to unlock the potential of both, this will eradicate the deep state once and for all, and we can have immutable money once again!
Bitcoin might become a popular medium-of-exchange once the market cap gets super high (tens of trillions of dollars), slowing down volatility. USD works for now.
I don’t think hundreds of millions are using bitcoin yet. Considering unique addresses, bitcoin usually stores each output in a new change address. Most users have dozens of addresses (or at least they should for privacy reasons). Coinbase as a public company is the only exchange reliably reporting number of users. My point: bitcoin is not new but it’s still very early in the adoption cycle :) Cheers. Keep up the trillionaire energy from lunch money days!!
Thanks Pomp 🤝 another read that I feel helps me temper my maxi outlooks to some middle ground that is anchored in facts!
"In order for any asset to become electronic cash, it must first become a store of value".
I agree with the premise of your article, but could you elaborate on the above? Why do you think this is the case? It seems that, at least historically, money has worked the other way around. As soon as an asset is seen as a store of value (e.g. gold) it was immediately discarded as a medium of exchange (e.g. gold).
Stablecoins are all centralized, and decentralization is one of Bitcoin's most powerful features
Dogecoin combines Bitcoin's decentralization, an issuance schedule that's more favorable to spending, and much fun meme virality.
Bitcoin for saving, Doge for spending! You know it's true, Pomp!
I believe the there will be a rising use of the lightning network in medium-of-exchange, but not necessarily with BTC. Apps like Strike (and believe Block is working on something similar) will be able to use fiat over the lightning network by converting fiat into BTC, sending and instantly converting back into fiat. Believe this will gain serious traction over the next 5-7 years both from a peer-to-peer and business transactions.
I worked in blockchain for a YEAR, and I *still* think transactions are scary as hell.
I'm always so nervous that I'm going to mess something up.
This means for the large majority of users, they'll be frozen with fear.
Until the user experience is *vastly* improved and users feel safe, it will not take off.
(It WILL get easier, eventually.)
Here in the Netherlands we did a similar experiment with tulip bulbs. It’s all fun and games as long as there is someone lined up to take over your ‘store of value’ and exchange it for an actual hard currency at that point in the future you need to liquidate. In the meantime you need to keep a close eye to two things:
1. The number of new recruits that are buying into your economic thesis. After all, the value goes up if more people chase the limited number of coins.
2. Make sure that the people who hold the bulbs keep them off the market so to ensure there’s limited supply and thus value. You need to sell before they do.
What could go wrong?
There are still people comparing Bitcoin to the 3 year Dutch tulip bulb craze?
Pff 3 years! Don’t underestimate us. We’re HODLing these things until we refined the sales pitch.
All madness aside, unlike bitcoin, you can actually apply a sensible monetary policy to bulbs in the context of a growing economy. Simply by increasing the number of bulbs as the economy is expanding you are able to maintain stability to the perceived value of this means of exchange. Such stability increases trust which forms the basis for the exchange of goods and services.
What we need for a stable currency can never be offered by bitcoin simply because it is designed to be limited in supply. Our economy is not! A look at the conclusion of this article by Pomp proves this - he mentions to not use this means of exchange anytime soon simply because it apparently has to increase in value. How’s that for a currency!? A means of exchange that’s not used as such because it’s perpetually perceived to be mispriced…
Now, whether we currently have an appropriate policy in place to ensure stability of our hard currencies is open for debate and I fully understand if you wish to hedge against this. But I would make the case that there are better vehicles to do so aside from digital coins.
What all these smart people here need to spend their energy on instead is to just focus on the big things that determine whether we can keep growing the pie: ensuring peace & stability, ability of goods and people to move freely and keep removing the friction that limit this, a rules based international order, containment of WMD’s and socialism… to name a few.
If you have taken care of these big things (most are in place btw so it’s mostly making sure not to blow it) it’s almost guaranteed that the pie will continue to grow. The best hedge then, against an inflating currency, is to own a piece of this growing pie.
I can assure you that in the future I’ll not be offering you any useful currency in exchange of a speculative digital coin. But if you offer me a piece of ownership in the economy, I’ll assess whatever that piece is producing in terms of usefull hard currency(!) at that time and will offer you the fair price for that. Paid in the same usefull currency you’ll be, ironically, looking for at that time.
Agree with you about store of value. And bitcoin is certainly the cleanest most direct antidote to currency debasement, whether it’s the slower debasement strategies in developed countries, or rapid debasement in lesser developed countries. Bitcoin is the best antidote.
It does seem that bitcoin as a medium of exchange is much greater if transactions are relatively large. For some people that means tens of thousands of dollars, and for others it means tens of millions of dollars.
Bitcoin is like Adam in the Bible. He needs a partner. Silver has been money for millennia, and manipulated since the great Silver crime of 1873. Silver could very well be the Eve equivalent for Bitcoin. It's clear that there is far more Gold in the world than anyone would care to admit (just read about Yamashita's Gold in the book Gold Warriors by Sterling Seagrave). Or if you believe in conspiracy theories such as the gold hidden in the Grand canyon. Although not approvable, there are enough stories pumped out like a Tom Clancy novel (more truth than fiction just disguised), that it's clear the phrase "roads paved with gold" may very well play out that way, somewhere in the world, someday! You do not hear the same things about silver. But we know for a fact that there is around 500 oz of Silver in your standard tomahawk cruise missile!
Bitcoin and Silver, a match made in heaven - if the community figures out how to unlock the potential of both, this will eradicate the deep state once and for all, and we can have immutable money once again!
Blessings,
Silence DoGood
☕✝️