Only if they realize losses in the short term by selling. If history is anything to go by we'll see it exceed 100k.
Cryptocurrency reality
- Thread starter scoot
- Start date
NTF?
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oh sorry nft's. It's been a long morning
You kinda can, one can get crypto.com Visa card (there are others too) and have fiat on it, it works as debit card. Crypto and fiat can be held on the card and converted back and forth, you manage the account via cell phone app. When you have fiat $ you can change currency in the app to use it as local currency when travelling. I paid with the card at various stores and places including abroad.
But crypto is not really meant to be used as currency, a few stable coins could be thou as their value is always pegged to US$ at 1:1.
But that would affect US$ use in a negative way thus coins like USDT are kinda banned in Canada and US. EU and Asia use USDT all the time esp to harness crypto gains without going to fiat.
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All great features for a currency.
What's missing is value stability or effectively exchange rate stability.
The really obscene part for me is the 160 Tera watt hours of energy that is wasted every year mining Bitcoin with the average energy consumed for one Bitcoin being 852 kWh. While this nonsense is going on, countries are trying to reduce emissions.
Mining for gold also has high costs. The real issue isn't instability of BTC, but the value of the USD. Gold and BTC reflect perceived dollar weakness.
Both buy inflation resistance.
Banking industry is using almost 2X that power.
Best as view as a fixed asset like gold but where the value is mostly driven by perception rather than reality.
Please point me to a fiat currency that currently has either of those? The world standard $USD has has a range of 100 to 110 in the last year against a basket of the rest of the worlds currencies. Look up the DXY.
I agree, Bitcoin isn't money. Neither are $USD - not a store of value. That is the true definition of money. Median of exchange, fungible, store of value. No fiat has the last part. If you had $20 in 2019 and threw in in a drawer, and took it out today - it buys 20% less than it did in 2019, according to the BLS.
There will only ever be a finite amount of bitcoin, so to a degree like gold, it should be a store of value.
I personally believe we will eventually end up with some sort of crypto currency as the global standard. The current system isn't working for average people. Likely won't be any of the current ones, this is sort of the beta test.
I don't have an issue with anything you say there, of course all currencies do fluctuate but not usually by amount that affects their use as an everyday currency. Crypto fluctuations can be orders of magnitude bigger which makes it harder to take seriously and it will need to stabilise to become a global standard and for people to have faith in it. Meanwhile it's a speculative currency.
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We are going to end up with a global standard for currency being something that never existed in reality. At least with the USD you can convert it to something your can hold in your hand. Have you ever seen a Bitcoin? No, because it does not exist.
Well, as posted above there is only about $2 Trillion in US dollar base money, and probably $150T globally denominated in USD debt including the euro dollar system (no one really knows).
Holding a piece of paper that says "legal tender for all debts public and private", yet merchants are not required to take it - is an illusion also.
Gold you can hold, and has value. No merchant takes it either, so its not a median of exchange anymore. If they did you would need a scale and a file. There is also the fact that it was confiscated in 1933 at $20 an ounce, and then 2 years later revalued at $35 an ounce. So really just stolen in the end.
I would be happy with whatever they can come up with that can't be debased at will.
How is gold different? Yeah, gold itself has some awesome metallurgical properties but that's not what props it up. It's just a cool rock.
It is a pretty hard to find and hard to extract "rock." That, and those awesome properties, make it valuable. Bitcoin has absolutely nothing backing it.
First of all, we need to define what is a currency, an asset, a crypo / blockchain, and demand & supply:
1) Currency: something you use for transaction without having to trade multiple times between places by bartering to get what you want. I don't think too many vendors in the world take crypto today. Most still use a government backed or derived currency (USD, Euro, Euro-dollar, even CNY or whatever N Korea uses). These currency need to stay relatively stable in value or else they are pointless as a medium of transaction. Also: in the past many fallen / no longer exist nations still have their past currency used for decades afterward because they were trusted and people still take them. Crypto is not it today despite initially designed to be one.
2) Asset: something that you hold onto and hope its value stay stable or slowly appreciate. Homes, metal, wood, food, land, gem stones, etc etc. Crypto are believed by some to be one but it doesn't produce value in real world as is, without someone else holding assets willing to accept a transaction using it. Personally I don't believe it is, but I also don't believe gold, diamond, etc is either. Silver and platinum might for their industrial use if they are priced reasonably enough.
3) block chain: you have a math equation that can be used as a way to record who owns what on each transaction, like a deed of your house since it was first granted to you by the government till the transaction to you or your house's future owner. In theory you cannot break this trust by altering it to scam people if the encryption is strong enough.... In theory, because one day quantum computing may break it, or one day computer is strong enough to brute force breaking it, or one day they found a flaw in the protocol and it can be broken just like all the wifi protocol till now. Do you trust your asset with encryption or do you trust a government with a military and legal system to protect you, or do you trust your own guns in the closet?
4) demand and supply: when a lot of people like and believe in something they will be in demand and the price rise, and when the trust is lost they will dump it and the price tank. Gold is a good example, and prior to gold it was sea shells. Silver used to be a currency reserve in many central banks until about 100 years ago, then it became gold, then it became just the trust in USD issued by US having a lot of gold and the >50% of military power in the world, and today someone want to tell me it is bitcoin and Etherum but not DOGE coins or S**T coin.... Many on Wall Street and around the world financial sectors believe in crypto, and many want sovereign nations to hold a lot of them just like holding gold. Currently large nations haven't yet, so the demand comes mostly from private sector and up to a certain point institutional investors and retail investors like us, but not governments.
You do you and believe what you want to believe in.
1) Currency: something you use for transaction without having to trade multiple times between places by bartering to get what you want. I don't think too many vendors in the world take crypto today. Most still use a government backed or derived currency (USD, Euro, Euro-dollar, even CNY or whatever N Korea uses). These currency need to stay relatively stable in value or else they are pointless as a medium of transaction. Also: in the past many fallen / no longer exist nations still have their past currency used for decades afterward because they were trusted and people still take them. Crypto is not it today despite initially designed to be one.
2) Asset: something that you hold onto and hope its value stay stable or slowly appreciate. Homes, metal, wood, food, land, gem stones, etc etc. Crypto are believed by some to be one but it doesn't produce value in real world as is, without someone else holding assets willing to accept a transaction using it. Personally I don't believe it is, but I also don't believe gold, diamond, etc is either. Silver and platinum might for their industrial use if they are priced reasonably enough.
3) block chain: you have a math equation that can be used as a way to record who owns what on each transaction, like a deed of your house since it was first granted to you by the government till the transaction to you or your house's future owner. In theory you cannot break this trust by altering it to scam people if the encryption is strong enough.... In theory, because one day quantum computing may break it, or one day computer is strong enough to brute force breaking it, or one day they found a flaw in the protocol and it can be broken just like all the wifi protocol till now. Do you trust your asset with encryption or do you trust a government with a military and legal system to protect you, or do you trust your own guns in the closet?
4) demand and supply: when a lot of people like and believe in something they will be in demand and the price rise, and when the trust is lost they will dump it and the price tank. Gold is a good example, and prior to gold it was sea shells. Silver used to be a currency reserve in many central banks until about 100 years ago, then it became gold, then it became just the trust in USD issued by US having a lot of gold and the >50% of military power in the world, and today someone want to tell me it is bitcoin and Etherum but not DOGE coins or S**T coin.... Many on Wall Street and around the world financial sectors believe in crypto, and many want sovereign nations to hold a lot of them just like holding gold. Currently large nations haven't yet, so the demand comes mostly from private sector and up to a certain point institutional investors and retail investors like us, but not governments.
You do you and believe what you want to believe in.
Blockchain is a technology, and anyone can create a new blockchain coin or NFT.
Fundamentally DOGE and S**T coins are the same technology wise as Bitcoin and Etherum, but DOGE and S**T coins are not trusted by investors like Bitcoin and Etherum.
So, what makes one coin trust worthy while not the other. What makes one country's currency (USD and Euro) trusted more than the other (like Argentine Peso or Venezuela Peso)?
You have to look at fair market value at all time in investment. That's not how you price any asset or investment decision.
You trust gold because a lot of government central banks have them in the vault instead of silver, salt, or sea shells, and they have high GDP and military powers to keep them "trustworthy".
How many of them actually hold BTC or ETH?
It's hard to find and extract bitcoin. The value of gold exceeds its metallurgical properties because of its perception.
