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Seeing Beyond the "Price Stability" of Bitcoin

12,237 Views | 131 Replies | Last: 9 mo ago by Algorithmic Epiphany
Adverse Event
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7:09a, 11/5/23
Alright, folks,

Every time I hear someone harp on about Bitcoin's "instability," I can't help but wonder if they're looking at the full picture or just cherry-picking their data. Let's break down some facts:

1. Decade-Long Uptrend: Since 2009, Bitcoin has shown impressive growth. A few bumps on the road don't define its journey.

2. Decentralized Strength No central puppet masters here. Bitcoin's decentralized nature keeps it resilient against many typical financial calamities.

3. 21 Million and Counting (Down): Bitcoin's supply is capped. Unlike some currencies (looking at you, fiat), we can't just conjure up more of it when things get tough.

4. Mainstream Embrace: Major businesses and institutions are jumping on the Bitcoin bandwagon. Instability? They don't seem to think so.

5. The Advisor U-Turn: Gone are the days when financial advisors would laugh off Bitcoin. Many are now championing a 5% portfolio allocation, up from the previous cautious 1%. That's not just a change; it's a revolution.

6. Borderless and Boundless: Bitcoin's global reach means it's not tied to the fate of any single economy. Diversification at its finest.

7. Not Just Digital Gold: Bitcoin isn't just a store of value; it's becoming a benchmark for other assets. A volatile benchmark? Hardly.

So, with all this in mind, where exactly does Bitcoin scream "UNSTABLE!"? Maybe it's time to reevaluate our biases and dig deeper than surface-level chatter.

Here are some nuggets to ponder:


How does the decentralized nature of Bitcoin offer more stability compared to centralized currencies?

What role does unit bias play in people's misconception of Bitcoin's value and stability?

How might the financial landscape shift as more institutions adopt and accept Bitcoin?


Keep questioning, keep exploring. And maybe, just maybe, keep HODLing.
What bitcoin’s detractors don’t understand is monetary economics, computer science, software engineering, network protocols, and electrical systems.

It ain't much, but it's honest Proof of Work.
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aTmAg
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7:34a, 11/5/23
AG
There is no point in looking beyond the price instability of bitcoin. Because of that alone, it is useless.

Bitcoin has not generally trended upward. Just because it's higher now than it was when it was first created doesn't mean squat. Look at it's (short) lifetime graph: It's gone from basically 0 to $60K, back down to $30K back up to $65K, back down to $15K and now at around $35K. All in less than a decade. To say that is a "general upward trend" is laughable. It's been all over the place.

Unlike owning stock in a company that builds stuff and pay dividends, or land that can be farmed or rented, gold that can be used as jewelry and in industry, and so on, the ONLY possible utility that bitcoin has is to be used as money. Yet one of the primary roles of money is to be a unit of account. So bitcoin being so ridiculously volatile makes it useless as money. Who in their right mind would offer or take out a mortgage in terms of bitcoin? Nobody sane. So it literally has practically zero utility.

So it's only "value" is speculative. Everybody who owns it has to hope they can find a bigger sucker to sell it to later. That's a system destined to fail.
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In reply to aTmAg • 8:28a, 11/5/23
AG
These are valid points...for now. But if it keeps getting adopted then perception becomes reality. This has happened throughout time with multiple artifacts.

Despite it having some level of industrial application, gold enjoys some of this as well simply because of how it looks. That's a total construct.

There is nothing preventing BTC from continuing to become a standard other than governments, like ours and China's, who will ultimately try to kill it. The latter government has already tried more than once.

My question to you is this: are you opposed to the idea of it or are just opposed to it because you don't think it's viable? I can understand the latter but cannot understand the former.
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ac04
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9:03a, 11/5/23
the beauty of bitcoin is that you can use it however you see fit. for me, bitcoin's best use case is as a savings technology, not as a transactional currency. my goal is to protect my purchasing power from debasement by using a provably scare asset that cannot be manipulated. so to evaluate its trend, i utilize low time preference and think in years. high time preference thinking would have me evaluating day-to-day or week-to-week price swings, but that's not relevant for me because its a long term hold, not something i want or need to use to buy coffee or gasoline or whatever. i have USD for that purpose. in a sense, USD is my checking account and BTC is my savings account.

with that in mind, let's check bitcoin's price throughout its history to evaluate its general overall trend. i will use today's date to avoid being accused of cherry-picking:

11/5/10 - $0.24
11/5/11 - $3.15
11/5/12 - $10.63
11/5/13 - $229.21
11/5/14 - $330.68
11/5/15 - $408.08
11/5/16 - $703.53
11/5/17 - $7,404.52
11/5/18 - $6,363.62
11/5/19 - $9,413.00
11/5/20 - $14,133.73
11/5/21 - $61,460.08
11/5/22 - $21,144.83
11/5/23 - $34,907.90

wow, that seems like a pretty clear general trend up.

since the idea of taking out a mortgage in BTC was mentioned earlier in the thread, let's measure the long-term purchasing power of BTC by comparing it to the long-term purchasing power of USD using the price of a home in the US. here is the median home price in november of each year denominated in USD according to national association of realtors:

2010 - $176,885.91
2011 - $172,234.05
2012 - $180,480.52
2013 - $192,888.68
2014 - $201,317.77
2015 - $212,332.29
2016 - $224,788.50
2017 - $239,215.02
2018 - $252,622.75
2019 - $266,059.31
2020 - $295,835.04
2021 - $347,956.99
2022 - $376,617.81
2023 - $412,000.00 (used september as november is not yet available)

yikes, there's a very clear trend there, we're losing purchasing power fast. and it seems to be accelerating as the unelected imbeciles in charge of our monetary policy debase at a faster and faster rate.

now let's look at the median home price in the US if we denominate in BTC:

2010 - 732,941.77 BTC
2011 - 54,699.09 BTC
2012 - 16,976.00 BTC
2013 - 841.54 BTC
2014 - 608.79 BTC
2015 - 520.32 BTC
2016 - 319.52 BTC
2017 - 32.21 BTC
2018 - 39.70 BTC
2019 - 28.77 BTC
2020 - 20.93 BTC
2021 - 5.66 BTC
2022 - 17.81 BTC
2023 - 11.81 BTC

wow, homes are getting a lot more affordable. all we had to do was change our time preference and thus change our perspective. its not hard to do, but for some reason people refuse to even consider looking at the facts about what bitcoin can do for them and instead rely on their preconceived notions about what they think bitcoin is supposed to be.
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In reply to ac04 • 9:06a, 11/5/23
AG
ac04 said:
the beauty of bitcoin is that you can use it however you see fit. for me, bitcoin's best use case is as a savings technology, not as a transactional currency. my goal is to protect my purchasing power from debasement by using a provably scare asset that cannot be manipulated.
This is my current use case as well. That could obviously evolve into transactional currency as it becomes more stable and adopted.
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In reply to YouBet • 9:43a, 11/5/23
AG
YouBet said:
These are valid points...for now. But if it keeps getting adopted then perception becomes reality. This has happened throughout time with multiple artifacts.

Despite it having some level of industrial application, gold enjoys some of this as well simply because of how it looks. That's a total construct.

There is nothing preventing BTC from continuing to become a standard other than governments, like ours and China's, who will ultimately try to kill it. The latter government has already tried more than once.

My question to you is this: are you opposed to the idea of it or are just opposed to it because you don't think it's viable? I can understand the latter but cannot understand the former.
Has any of the places that have "adopted" it actually have their people using it for short term and long term transactions? Or are their governments just buying some of it? Because the former is a far cry from the latter.

And you forgot the biggest reason gold has been adopted as money: That it lasts forever. It is chemically stable, never tarnishes, and all of that. The gold used by the Egyptians is still in use by somebody today.

And I think the only thing that would make bitcoin a standard is the adoption of bitcoin as the sole currency by a large global economic power like the US or China.


And I'm not opposed to the idea, but the execution. Bitcoin's fatal flaw is that it is not backed by anything. It's value is 100% based on speculation which guarantees it to be volatile as hell. I think the ideal currency is one that is backed, not just by gold, but by a diverse basked of stable things. Such a thing is now possible with the internet where it wasn't before. That the basket would be like 1% gold, 1% silver, 1% new (unowned) cars, 1% land, etc. That only things that are stable would be allowed in the basket and and the prices of each would fluctuate to ensure that the percentages within the basket stay the same. Something like that. I have no idea if such a thing is already illegal via banking acts of the 1860s or not. I haven't had the time to go look that up.
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9:59a, 11/5/23
I found a bitcoin in the parking lot last week, guess someone didn't know they dropped it.
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In reply to aTmAg • 10:14a, 11/5/23
Metaphor:

In 2008, Satoshi's revelation of Bitcoin was akin to ancient humans discovering the silkworm. For ages, these worms existed, spinning their cocoons in obscurity, their potential unrealized. Just as early cultivators learned to harness these worms, Satoshi and the early adopters recognized the potential of this new "digital cocoon." They began the meticulous process of refining it. Over time, just as silkworm threads were carefully extracted and woven into the lustrous fabric of silk, Bitcoin's potential was unraveled and woven into the intricate tapestry of the financial world. Silk, once a luxury reserved for royalty and the elite, became a sought-after commodity worldwide. Similarly, Bitcoin, initially understood by a select few, has now become a treasured asset, its value recognized globally. And just as every strand of silk contributes to the fabric's overall strength and value, every Satoshi adds to the collective worth of Bitcoin.

For the undereducated, or overeducated, all you might see are stupid caterpillars.
What bitcoin’s detractors don’t understand is monetary economics, computer science, software engineering, network protocols, and electrical systems.

It ain't much, but it's honest Proof of Work.
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In reply to aTmAg • 10:15a, 11/5/23
AG
aTmAg said:
YouBet said:
These are valid points...for now. But if it keeps getting adopted then perception becomes reality. This has happened throughout time with multiple artifacts.

Despite it having some level of industrial application, gold enjoys some of this as well simply because of how it looks. That's a total construct.

There is nothing preventing BTC from continuing to become a standard other than governments, like ours and China's, who will ultimately try to kill it. The latter government has already tried more than once.

My question to you is this: are you opposed to the idea of it or are just opposed to it because you don't think it's viable? I can understand the latter but cannot understand the former.
Has any of the places that have "adopted" it actually have their people using it for short term and long term transactions? Or are their governments just buying some of it? Because the former is a far cry from the latter.

And you forgot the biggest reason gold has been adopted as money: That it lasts forever. It is chemically stable, never tarnishes, and all of that. The gold used by the Egyptians is still in use by somebody today.

And I think the only thing that would make bitcoin a standard is the adoption of bitcoin as the sole currency by a large global economic power like the US or China.


And I'm not opposed to the idea, but the execution. Bitcoin's fatal flaw is that it is not backed by anything. It's value is 100% based on speculation which guarantees it to be volatile as hell. I think the ideal currency is one that is backed, not just by gold, but by a diverse basked of stable things. Such a thing is now possible with the internet where it wasn't before. That the basket would be like 1% gold, 1% silver, 1% new (unowned) cars, 1% land, etc. That only things that are stable would be allowed in the basket and and the prices of each would fluctuate to ensure that the percentages within the basket stay the same. Something like that. I have no idea if such a thing is already illegal via banking acts of the 1860s or not. I haven't had the time to go look that up.

Quote:
Has any of the places that have "adopted" it actually have their people using it for short term and long term transactions? Or are their governments just buying some of it? Because the former is a far cry from the latter.
I believe El Salvador is using it transactionally but I haven't checked into that in some time.

Quote:
And you forgot the biggest reason gold has been adopted as money: That it lasts forever. It is chemically stable, never tarnishes, and all of that. The gold used by the Egyptians is still in use by somebody today.

And I think the only thing that would make bitcoin a standard is the adoption of bitcoin as the sole currency by a large global economic power like the US or China.
BTC also lasts forever assuming we aren't in a catastrophic, dystopian world where we have regressed to the stone age. (Frankly, we get closer to that every day.) Outside of that worst case scenario, I would argue that as our society gets more and more digital the younger generations are going to value a corresponding digital currency. They largely don't care about material things; they value experiences. And those experiences are going to increasingly be virtual as technology continues to progress. Obviously, CBDC could fill this need but then you have defeated the main tenet of BTC which is for it be decentralized and uncontrolled by a government. Adoption of CBDC is one of two last walls against total tyranny and unfortunately that is the likely outcome with digital currency.

On that point, I would agree with you that full scale adoption is most likely dependent on a major power adopting it in some fashion or at least pulls it into the fold as another payment channel of some sort.

Quote:
I think the ideal currency is one that is backed, not just by gold, but by a diverse basked of stable things. Such a thing is now possible with the internet where it wasn't before. That the basket would be like 1% gold, 1% silver, 1% new (unowned) cars, 1% land, etc. That only things that are stable would be allowed in the basket and and the prices of each would fluctuate to ensure that the percentages within the basket stay the same. Something like that. I have no idea if such a thing is already illegal via banking acts of the 1860s or not. I haven't had the time to go look that up.
Interesting idea. I want to say that has been tried at some point in history, but it failed. Maybe current tech could enable it.
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aTmAg
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In reply to Adverse Event • 10:20a, 11/5/23
AG
Adverse Event said:
Metaphor:

In 2008, Satoshi's revelation of Bitcoin was akin to ancient humans discovering the silkworm. For ages, these worms existed, spinning their cocoons in obscurity, their potential unrealized. Just as early cultivators learned to harness these worms, Satoshi and the early adopters recognized the potential of this new "digital cocoon." They began the meticulous process of refining it. Over time, just as silkworm threads were carefully extracted and woven into the lustrous fabric of silk, Bitcoin's potential was unraveled and woven into the intricate tapestry of the financial world. Silk, once a luxury reserved for royalty and the elite, became a sought-after commodity worldwide. Similarly, Bitcoin, initially understood by a select few, has now become a treasured asset, its value recognized globally. And just as every strand of silk contributes to the fabric's overall strength and value, every Satoshi adds to the collective worth of Bitcoin.

For the undereducated, or overeducated, all you might see are stupid caterpillars.
You really need to work on your metaphors.

Digital beanie babies would be a better one. I say digital, because at least with real beanie babies, owners had the ability to cuddle with them after they became nearly worthless.
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In reply to ac04 • 10:30a, 11/5/23
AG
ac04 said:
the beauty of bitcoin is that you can use it however you see fit. for me, bitcoin's best use case is as a savings technology, not as a transactional currency. my goal is to protect my purchasing power from debasement by using a provably scare asset that cannot be manipulated. so to evaluate its trend, i utilize low time preference and think in years. high time preference thinking would have me evaluating day-to-day or week-to-week price swings, but that's not relevant for me because its a long term hold, not something i want or need to use to buy coffee or gasoline or whatever. i have USD for that purpose. in a sense, USD is my checking account and BTC is my savings account.

with that in mind, let's check bitcoin's price throughout its history to evaluate its general overall trend. i will use today's date to avoid being accused of cherry-picking:

11/5/10 - $0.24
11/5/11 - $3.15
11/5/12 - $10.63
11/5/13 - $229.21
11/5/14 - $330.68
11/5/15 - $408.08
11/5/16 - $703.53
11/5/17 - $7,404.52
11/5/18 - $6,363.62
11/5/19 - $9,413.00
11/5/20 - $14,133.73
11/5/21 - $61,460.08
11/5/22 - $21,144.83
11/5/23 - $34,907.90

wow, that seems like a pretty clear general trend up.

since the idea of taking out a mortgage in BTC was mentioned earlier in the thread, let's measure the long-term purchasing power of BTC by comparing it to the long-term purchasing power of USD using the price of a home in the US. here is the median home price in november of each year denominated in USD according to national association of realtors:

2010 - $176,885.91
2011 - $172,234.05
2012 - $180,480.52
2013 - $192,888.68
2014 - $201,317.77
2015 - $212,332.29
2016 - $224,788.50
2017 - $239,215.02
2018 - $252,622.75
2019 - $266,059.31
2020 - $295,835.04
2021 - $347,956.99
2022 - $376,617.81
2023 - $412,000.00 (used september as november is not yet available)

yikes, there's a very clear trend there, we're losing purchasing power fast. and it seems to be accelerating as the unelected imbeciles in charge of our monetary policy debase at a faster and faster rate.

now let's look at the median home price in the US if we denominate in BTC:

2010 - 732,941.77 BTC
2011 - 54,699.09 BTC
2012 - 16,976.00 BTC
2013 - 841.54 BTC
2014 - 608.79 BTC
2015 - 520.32 BTC
2016 - 319.52 BTC
2017 - 32.21 BTC
2018 - 39.70 BTC
2019 - 28.77 BTC
2020 - 20.93 BTC
2021 - 5.66 BTC
2022 - 17.81 BTC
2023 - 11.81 BTC

wow, homes are getting a lot more affordable. all we had to do was change our time preference and thus change our perspective. its not hard to do, but for some reason people refuse to even consider looking at the facts about what bitcoin can do for them and instead rely on their preconceived notions about what they think bitcoin is supposed to be.
This proves my point. Somebody in 2010 takes out a 30 year loan at 5% for 732,941.77 BTC to buy their home. Their payments would be 3,934.59 BTC per month. Yet a mere 13 years later, their monthly payments would each be worth over 333 homes. Who in their right mind would go through with that contract? Nobody. Furthermore, if somebody took their loan out in 2021 then the bank would lose their asses in the years following.

For something to be viable as a currency, the financial future 30 years from now must be predictable. With BTC, it is anything but.
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10:35a, 11/5/23
AG
Saw a nice plot of Google search interest recently that highlighted the Bitcoin fad.

Going to find it now.
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aTmAg
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In reply to YouBet • 10:41a, 11/5/23
AG
YouBet said:
BTC also lasts forever assuming we aren't in a catastrophic, dystopian world where we have regressed to the stone age. (Frankly, we get closer to that every day.) Outside of that worst case scenario, I would argue that as our society gets more and more digital the younger generations are going to value a corresponding digital currency. They largely don't care about material things; they value experiences. And those experiences are going to increasingly be virtual as technology continues to progress. Obviously, CBDC could fill this need but then you have defeated the main tenet of BTC which is for it be decentralized and uncontrolled by a government. Adoption of CBDC is one of two last walls against total tyranny and unfortunately that is the likely outcome with digital currency.

BTC lasts forever in the sense that the number 7 lasts forever. It's just a concept. But is not likely that it's value will last forever. The entire reason people collected gold thousands of years ago is because they valued it just like we do today. There is basically 0% chance that people will stop valuing it anymore. In fact, gold is probably at it's lowest value right now since very little of it's demand is in the form of money. When fiat currencies die, then people will come back to it and the value will rise and then become quite stable at that new high point.
Quote:
Interesting idea. I want to say that has been tried at some point in history, but it failed. Maybe current tech could enable it.
We've only had the internet and smart phones for about 15 years. Where could it have been tried?
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ac04
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In reply to aTmAg • 10:41a, 11/5/23
aTmAg said:
ac04 said:
the beauty of bitcoin is that you can use it however you see fit. for me, bitcoin's best use case is as a savings technology, not as a transactional currency. my goal is to protect my purchasing power from debasement by using a provably scare asset that cannot be manipulated. so to evaluate its trend, i utilize low time preference and think in years. high time preference thinking would have me evaluating day-to-day or week-to-week price swings, but that's not relevant for me because its a long term hold, not something i want or need to use to buy coffee or gasoline or whatever. i have USD for that purpose. in a sense, USD is my checking account and BTC is my savings account.

with that in mind, let's check bitcoin's price throughout its history to evaluate its general overall trend. i will use today's date to avoid being accused of cherry-picking:

11/5/10 - $0.24
11/5/11 - $3.15
11/5/12 - $10.63
11/5/13 - $229.21
11/5/14 - $330.68
11/5/15 - $408.08
11/5/16 - $703.53
11/5/17 - $7,404.52
11/5/18 - $6,363.62
11/5/19 - $9,413.00
11/5/20 - $14,133.73
11/5/21 - $61,460.08
11/5/22 - $21,144.83
11/5/23 - $34,907.90

wow, that seems like a pretty clear general trend up.

since the idea of taking out a mortgage in BTC was mentioned earlier in the thread, let's measure the long-term purchasing power of BTC by comparing it to the long-term purchasing power of USD using the price of a home in the US. here is the median home price in november of each year denominated in USD according to national association of realtors:

2010 - $176,885.91
2011 - $172,234.05
2012 - $180,480.52
2013 - $192,888.68
2014 - $201,317.77
2015 - $212,332.29
2016 - $224,788.50
2017 - $239,215.02
2018 - $252,622.75
2019 - $266,059.31
2020 - $295,835.04
2021 - $347,956.99
2022 - $376,617.81
2023 - $412,000.00 (used september as november is not yet available)

yikes, there's a very clear trend there, we're losing purchasing power fast. and it seems to be accelerating as the unelected imbeciles in charge of our monetary policy debase at a faster and faster rate.

now let's look at the median home price in the US if we denominate in BTC:

2010 - 732,941.77 BTC
2011 - 54,699.09 BTC
2012 - 16,976.00 BTC
2013 - 841.54 BTC
2014 - 608.79 BTC
2015 - 520.32 BTC
2016 - 319.52 BTC
2017 - 32.21 BTC
2018 - 39.70 BTC
2019 - 28.77 BTC
2020 - 20.93 BTC
2021 - 5.66 BTC
2022 - 17.81 BTC
2023 - 11.81 BTC

wow, homes are getting a lot more affordable. all we had to do was change our time preference and thus change our perspective. its not hard to do, but for some reason people refuse to even consider looking at the facts about what bitcoin can do for them and instead rely on their preconceived notions about what they think bitcoin is supposed to be.
This proves my point. Somebody in 2010 takes out a 30 year loan at 5% for 732,941.77 BTC to buy their home. Their payments would be 3,934.59 BTC per month. Yet a mere 13 years later, their monthly payments would each be worth over 333 homes. Who in their right mind would go through with that contract? Nobody. Furthermore, if somebody took their loan out in 2021 then the bank would lose their asses in the years following.

For something to be viable as a currency, the financial future 30 years from now must be predictable. With BTC, it is anything but.


how is it possible to miss the point this badly. obviously the play is to borrow the asset that is rapidly depreciating and save the asset that is rapidly appreciating. my 10 year old understands this.
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aTmAg
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In reply to ac04 • 11:03a, 11/5/23
AG
ac04 said:
aTmAg said:
ac04 said:
the beauty of bitcoin is that you can use it however you see fit. for me, bitcoin's best use case is as a savings technology, not as a transactional currency. my goal is to protect my purchasing power from debasement by using a provably scare asset that cannot be manipulated. so to evaluate its trend, i utilize low time preference and think in years. high time preference thinking would have me evaluating day-to-day or week-to-week price swings, but that's not relevant for me because its a long term hold, not something i want or need to use to buy coffee or gasoline or whatever. i have USD for that purpose. in a sense, USD is my checking account and BTC is my savings account.

with that in mind, let's check bitcoin's price throughout its history to evaluate its general overall trend. i will use today's date to avoid being accused of cherry-picking:

11/5/10 - $0.24
11/5/11 - $3.15
11/5/12 - $10.63
11/5/13 - $229.21
11/5/14 - $330.68
11/5/15 - $408.08
11/5/16 - $703.53
11/5/17 - $7,404.52
11/5/18 - $6,363.62
11/5/19 - $9,413.00
11/5/20 - $14,133.73
11/5/21 - $61,460.08
11/5/22 - $21,144.83
11/5/23 - $34,907.90

wow, that seems like a pretty clear general trend up.

since the idea of taking out a mortgage in BTC was mentioned earlier in the thread, let's measure the long-term purchasing power of BTC by comparing it to the long-term purchasing power of USD using the price of a home in the US. here is the median home price in november of each year denominated in USD according to national association of realtors:

2010 - $176,885.91
2011 - $172,234.05
2012 - $180,480.52
2013 - $192,888.68
2014 - $201,317.77
2015 - $212,332.29
2016 - $224,788.50
2017 - $239,215.02
2018 - $252,622.75
2019 - $266,059.31
2020 - $295,835.04
2021 - $347,956.99
2022 - $376,617.81
2023 - $412,000.00 (used september as november is not yet available)

yikes, there's a very clear trend there, we're losing purchasing power fast. and it seems to be accelerating as the unelected imbeciles in charge of our monetary policy debase at a faster and faster rate.

now let's look at the median home price in the US if we denominate in BTC:

2010 - 732,941.77 BTC
2011 - 54,699.09 BTC
2012 - 16,976.00 BTC
2013 - 841.54 BTC
2014 - 608.79 BTC
2015 - 520.32 BTC
2016 - 319.52 BTC
2017 - 32.21 BTC
2018 - 39.70 BTC
2019 - 28.77 BTC
2020 - 20.93 BTC
2021 - 5.66 BTC
2022 - 17.81 BTC
2023 - 11.81 BTC

wow, homes are getting a lot more affordable. all we had to do was change our time preference and thus change our perspective. its not hard to do, but for some reason people refuse to even consider looking at the facts about what bitcoin can do for them and instead rely on their preconceived notions about what they think bitcoin is supposed to be.
This proves my point. Somebody in 2010 takes out a 30 year loan at 5% for 732,941.77 BTC to buy their home. Their payments would be 3,934.59 BTC per month. Yet a mere 13 years later, their monthly payments would each be worth over 333 homes. Who in their right mind would go through with that contract? Nobody. Furthermore, if somebody took their loan out in 2021 then the bank would lose their asses in the years following.

For something to be viable as a currency, the financial future 30 years from now must be predictable. With BTC, it is anything but.


how is it possible to miss the point this badly. obviously the play is to borrow the asset that is rapidly depreciating and save the asset that is rapidly appreciating. my 10 year old understands this.
I agree on somebody missing the point badly. But that somebody isn't me.

Money isn't supposed to appreciate or depreciate rapidly. That's not it's role. Because BTC does both is why it is not suitable as money, and that was the purpose it was supposed to serve. Now it's left to serve no real purpose.

Instead, it's only value now is in speculation where people hope to sell it to a bigger sucker than they were when they bought it. Eventually it will run out of suckers.
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In reply to aTmAg • 11:06a, 11/5/23
I don't really know how to talk to people who've been aware of bitcoin for a decade and still don't grasp it. I'm still trying, which says a lot. I admire Sisyphus, at least he doesn't have an option.
What bitcoin’s detractors don’t understand is monetary economics, computer science, software engineering, network protocols, and electrical systems.

It ain't much, but it's honest Proof of Work.
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In reply to aTmAg • 11:06a, 11/5/23
aTmAg said:
ac04 said:
aTmAg said:
ac04 said:
the beauty of bitcoin is that you can use it however you see fit. for me, bitcoin's best use case is as a savings technology, not as a transactional currency. my goal is to protect my purchasing power from debasement by using a provably scare asset that cannot be manipulated. so to evaluate its trend, i utilize low time preference and think in years. high time preference thinking would have me evaluating day-to-day or week-to-week price swings, but that's not relevant for me because its a long term hold, not something i want or need to use to buy coffee or gasoline or whatever. i have USD for that purpose. in a sense, USD is my checking account and BTC is my savings account.

with that in mind, let's check bitcoin's price throughout its history to evaluate its general overall trend. i will use today's date to avoid being accused of cherry-picking:

11/5/10 - $0.24
11/5/11 - $3.15
11/5/12 - $10.63
11/5/13 - $229.21
11/5/14 - $330.68
11/5/15 - $408.08
11/5/16 - $703.53
11/5/17 - $7,404.52
11/5/18 - $6,363.62
11/5/19 - $9,413.00
11/5/20 - $14,133.73
11/5/21 - $61,460.08
11/5/22 - $21,144.83
11/5/23 - $34,907.90

wow, that seems like a pretty clear general trend up.

since the idea of taking out a mortgage in BTC was mentioned earlier in the thread, let's measure the long-term purchasing power of BTC by comparing it to the long-term purchasing power of USD using the price of a home in the US. here is the median home price in november of each year denominated in USD according to national association of realtors:

2010 - $176,885.91
2011 - $172,234.05
2012 - $180,480.52
2013 - $192,888.68
2014 - $201,317.77
2015 - $212,332.29
2016 - $224,788.50
2017 - $239,215.02
2018 - $252,622.75
2019 - $266,059.31
2020 - $295,835.04
2021 - $347,956.99
2022 - $376,617.81
2023 - $412,000.00 (used september as november is not yet available)

yikes, there's a very clear trend there, we're losing purchasing power fast. and it seems to be accelerating as the unelected imbeciles in charge of our monetary policy debase at a faster and faster rate.

now let's look at the median home price in the US if we denominate in BTC:

2010 - 732,941.77 BTC
2011 - 54,699.09 BTC
2012 - 16,976.00 BTC
2013 - 841.54 BTC
2014 - 608.79 BTC
2015 - 520.32 BTC
2016 - 319.52 BTC
2017 - 32.21 BTC
2018 - 39.70 BTC
2019 - 28.77 BTC
2020 - 20.93 BTC
2021 - 5.66 BTC
2022 - 17.81 BTC
2023 - 11.81 BTC

wow, homes are getting a lot more affordable. all we had to do was change our time preference and thus change our perspective. its not hard to do, but for some reason people refuse to even consider looking at the facts about what bitcoin can do for them and instead rely on their preconceived notions about what they think bitcoin is supposed to be.
This proves my point. Somebody in 2010 takes out a 30 year loan at 5% for 732,941.77 BTC to buy their home. Their payments would be 3,934.59 BTC per month. Yet a mere 13 years later, their monthly payments would each be worth over 333 homes. Who in their right mind would go through with that contract? Nobody. Furthermore, if somebody took their loan out in 2021 then the bank would lose their asses in the years following.

For something to be viable as a currency, the financial future 30 years from now must be predictable. With BTC, it is anything but.


how is it possible to miss the point this badly. obviously the play is to borrow the asset that is rapidly depreciating and save the asset that is rapidly appreciating. my 10 year old understands this.
I agree on somebody missing the point badly. But that somebody isn't me.

Money isn't supposed to appreciate or depreciate rapidly. That's not it's role. Because BTC does both is why it is not suitable as money, and that was the purpose it was supposed to serve. Now it's left to serve no real purpose.

Instead, its only value now is in speculation where people hope to sell it to a bigger sucker than they were when they bought it. Eventually it will run out of suckers.


Quote:
its not hard to do, but for some reason people refuse to even consider looking at the facts about what bitcoin can do for them and instead rely on their preconceived notions about what they think bitcoin is supposed to be.
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In reply to aTmAg • 11:13a, 11/5/23
aTmAg, while your concerns about Bitcoin's predictability are noted, it's important to remember a few key things:

1. **History of Monetary Evolution**: The U.S. dollar faced its own slew of issues, including hyperinflation and significant transformations. New systems face skepticism and volatility before they stabilize. Bitcoin is no exception.

2. **Bitcoin's Primary Purpose**: Let's be clear. Many view Bitcoin primarily as a store of value, not a daily transactional currency. Comparing it to traditional mortgage structures is comparing apples to oranges.

3. **Predictability is Relative**: Think the U.S. dollar's future is any more predictable? Economic crises, political decisions, wars they all play a role. No currency's future is crystal clear.

4. **Smart Contracts & Future Solutions**: The blockchain technology underlying Bitcoin allows for solutions like smart contracts. Over time, these can be developed to address the kind of mortgage scenario you described.

5. **Risk and Reward Perspective**: Every investment has risks. But as Bitcoin's historical performance shows, the rewards for those with a long-term perspective have been significant.

In short, Bitcoin's evolution is ongoing. Dismissing it based on current concerns is short-sighted.
What bitcoin’s detractors don’t understand is monetary economics, computer science, software engineering, network protocols, and electrical systems.

It ain't much, but it's honest Proof of Work.
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In reply to Adverse Event • 11:17a, 11/5/23
AG
Adverse Event said:
I don't really know how to talk to people who've been aware of bitcoin for a decade and still don't grasp it. I'm still trying, which says a lot. I admire Sisyphus, at least he doesn't have an option.
That's like saying, "I don't know how to talk to people who have been aware of flat earth for a decade and still don't grasp it." Bitcoin is not a complicated concept to grasp. Especially for a software engineer who used to specialize in cryptography. People like me don't disagree because we don't "grasp it" we disagree because we do grasp it.

Don't be like those conspiracy theorists who refuse to consider that perhaps they may actually be wrong.
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In reply to aTmAg • 11:27a, 11/5/23
aTmAg said:
Adverse Event said:
I don't really know how to talk to people who've been aware of bitcoin for a decade and still don't grasp it. I'm still trying, which says a lot. I admire Sisyphus, at least he doesn't have an option.
That's like saying, "I don't know how to talk to people who have been aware of flat earth for a decade and still don't grasp it." Bitcoin is not a complicated concept to grasp. Especially for a software engineer who used to specialize in cryptography. People like me don't disagree because we don't "grasp it" we disagree because we do grasp it.

Don't be like those conspiracy theorists who refuse to consider that perhaps they may actually be wrong.
the irony here is unreal. you have been repeating the same talking points on bitcoin for over a decade, and in that time you have missed out on securing financial freedom for yourself and generational wealth for your descendants. but still you refuse to consider that you may be the one who is wrong.
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In reply to aTmAg • 11:28a, 11/5/23
aTmAg said:
Adverse Event said:
I don't really know how to talk to people who've been aware of bitcoin for a decade and still don't grasp it. I'm still trying, which says a lot. I admire Sisyphus, at least he doesn't have an option.
That's like saying, "I don't know how to talk to people who have been aware of flat earth for a decade and still don't grasp it." Bitcoin is not a complicated concept to grasp. Especially for a software engineer who used to specialize in cryptography. People like me don't disagree because we don't "grasp it" we disagree because we do grasp it.

Don't be like those conspiracy theorists who refuse to consider that perhaps they may actually be wrong.
your assumption is my background must be lacking?
What bitcoin’s detractors don’t understand is monetary economics, computer science, software engineering, network protocols, and electrical systems.

It ain't much, but it's honest Proof of Work.
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In reply to Adverse Event • 11:44a, 11/5/23
AG
Adverse Event said:
aTmAg, while your concerns about Bitcoin's predictability are noted, it's important to remember a few key things:

1. **History of Monetary Evolution**: The U.S. dollar faced its own slew of issues, including hyperinflation and significant transformations. New systems face skepticism and volatility before they stabilize. Bitcoin is no exception.
The dollar never faced the fundamental issue of people refusing to use it as money. That's about as fundamental of a problem to a currency as it gets.

Quote:
2. **Bitcoin's Primary Purpose**: Let's be clear. Many view Bitcoin primarily as a store of value, not a daily transactional currency. Comparing it to traditional mortgage structures is comparing apples to oranges.
You (and other BTC defenders) keep moving the goal posts. It absolutely was being touted as the next currency. People were buying pizzas with it and celebrating. But then that failed and now you guys pretend it's only a "store of value"? But even there it sucks. Something that occasionally looses 50% of it's value within a single year is a terrible store of value. Even the dollar, which has been inflated out the ass hasn't come close to doing that.

Quote:
3. **Predictability is Relative**: Think the U.S. dollar's future is any more predictable? Economic crises, political decisions, wars they all play a role. No currency's future is crystal clear.
They are all much more clear than BTC. That's the point.

Quote:
4. **Smart Contracts & Future Solutions**: The blockchain technology underlying Bitcoin allows for solutions like smart contracts. Over time, these can be developed to address the kind of mortgage scenario you described.
Until the value is stable, it doesn't matter what technology is. Lenders and borrowers are not going to sign multi-decade long contracts when they face the real possibility of loosing everything. Even if the technology is spectacular.

Quote:
5. **Risk and Reward Perspective**: Every investment has risks. But as Bitcoin's historical performance shows, the rewards for those with a long-term perspective have been significant.
To the contrary. ONLY people who have been invested from the beginning have significant gains. People who got into it during the booms have lost their asses.

Quote:
In short, Bitcoin's evolution is ongoing. Dismissing it based on current concerns is short-sighted.
These are excuses, not "evolution".
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11:46a, 11/5/23
Ain't no FIAT-EARTHER.
What bitcoin’s detractors don’t understand is monetary economics, computer science, software engineering, network protocols, and electrical systems.

It ain't much, but it's honest Proof of Work.
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In reply to ac04 • 11:50a, 11/5/23
AG
ac04 said:
aTmAg said:
Adverse Event said:
I don't really know how to talk to people who've been aware of bitcoin for a decade and still don't grasp it. I'm still trying, which says a lot. I admire Sisyphus, at least he doesn't have an option.
That's like saying, "I don't know how to talk to people who have been aware of flat earth for a decade and still don't grasp it." Bitcoin is not a complicated concept to grasp. Especially for a software engineer who used to specialize in cryptography. People like me don't disagree because we don't "grasp it" we disagree because we do grasp it.

Don't be like those conspiracy theorists who refuse to consider that perhaps they may actually be wrong.
the irony here is unreal. you have been repeating the same talking points on bitcoin for over a decade, and in that time you have missed out on securing financial freedom for yourself and generational wealth for your descendants. but still you refuse to consider that you may be the one who is wrong.
I have been correct for over a decade. I said it would never become a currency. I have been right. Notice how even most BTC proponents have given up on that. Back when you guys were posting that gif of BTC zooming to infinity, I told people that it's going to crash and to not buy into it. I was right, and it crashed big time.

As long as it's value is 100% speculative, it will continue to have these problems. That has never changed. I have been right the whole time.
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In reply to Adverse Event • 11:52a, 11/5/23
AG
Adverse Event said:
aTmAg said:
Adverse Event said:
I don't really know how to talk to people who've been aware of bitcoin for a decade and still don't grasp it. I'm still trying, which says a lot. I admire Sisyphus, at least he doesn't have an option.
That's like saying, "I don't know how to talk to people who have been aware of flat earth for a decade and still don't grasp it." Bitcoin is not a complicated concept to grasp. Especially for a software engineer who used to specialize in cryptography. People like me don't disagree because we don't "grasp it" we disagree because we do grasp it.

Don't be like those conspiracy theorists who refuse to consider that perhaps they may actually be wrong.
your assumption is my background must be lacking?
I think it has become a religion to you. That somebody denying that BTC is anything other than the savior of the universe is like telling a Muslim that Muhammad was a charlatan. (Edit: at least you won't kill anybody over it.. I hope)
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ac04
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In reply to aTmAg • 12:01p, 11/5/23
aTmAg said:
ac04 said:
aTmAg said:
Adverse Event said:
I don't really know how to talk to people who've been aware of bitcoin for a decade and still don't grasp it. I'm still trying, which says a lot. I admire Sisyphus, at least he doesn't have an option.
That's like saying, "I don't know how to talk to people who have been aware of flat earth for a decade and still don't grasp it." Bitcoin is not a complicated concept to grasp. Especially for a software engineer who used to specialize in cryptography. People like me don't disagree because we don't "grasp it" we disagree because we do grasp it.

Don't be like those conspiracy theorists who refuse to consider that perhaps they may actually be wrong.
the irony here is unreal. you have been repeating the same talking points on bitcoin for over a decade, and in that time you have missed out on securing financial freedom for yourself and generational wealth for your descendants. but still you refuse to consider that you may be the one who is wrong.
I have been correct for over a decade. I said it would never become a currency. I have been right. Notice how even most BTC proponents have given up on that. Back when you guys were posting that gif of BTC zooming to infinity, I told people that it's going to crash and to not buy into it. I was right, and it crashed big time.

As long as it's value is 100% speculative, it will continue to have these problems. That has never changed. I have been right the whole time.


it's obvious you can't be helped so i will bow out for now. but to be clear, there is absolutely no scenario where missing out on a 3,000x because of your own hubris makes you correct about anything.
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In reply to ac04 • 12:12p, 11/5/23
AG
ac04 said:
aTmAg said:
ac04 said:
aTmAg said:
Adverse Event said:
I don't really know how to talk to people who've been aware of bitcoin for a decade and still don't grasp it. I'm still trying, which says a lot. I admire Sisyphus, at least he doesn't have an option.
That's like saying, "I don't know how to talk to people who have been aware of flat earth for a decade and still don't grasp it." Bitcoin is not a complicated concept to grasp. Especially for a software engineer who used to specialize in cryptography. People like me don't disagree because we don't "grasp it" we disagree because we do grasp it.

Don't be like those conspiracy theorists who refuse to consider that perhaps they may actually be wrong.
the irony here is unreal. you have been repeating the same talking points on bitcoin for over a decade, and in that time you have missed out on securing financial freedom for yourself and generational wealth for your descendants. but still you refuse to consider that you may be the one who is wrong.
I have been correct for over a decade. I said it would never become a currency. I have been right. Notice how even most BTC proponents have given up on that. Back when you guys were posting that gif of BTC zooming to infinity, I told people that it's going to crash and to not buy into it. I was right, and it crashed big time.

As long as it's value is 100% speculative, it will continue to have these problems. That has never changed. I have been right the whole time.


it's obvious you can't be helped so i will bow out for now. but to be clear, there is absolutely no scenario where missing out on a 3,000x because of your own hubris makes you correct about anything.
Just because you found some sucker willing to pay you 3,000x doesn't make you correct. At some point, suckers are going to basically loose everything. If you end up not being one of those, then that would make you lucky on timing. Not correct on the principle.

I'm not accusing you of being a con-man, since you are a true believer. But a person like me would be a con-man since I fully understand that BTC is speculative based and dependent on suckers. I want no part of that. Not to mention, I may time it wrong and lose my ass.

I'd rather buy a stock, and then have that company grow into something of real value. Then I can sell that stock for many times what I payed for it without guilt. Because the thing I am selling really is worth that much.
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In reply to aTmAg • 12:13p, 11/5/23
AG
aTmAg said:
YouBet said:
BTC also lasts forever assuming we aren't in a catastrophic, dystopian world where we have regressed to the stone age. (Frankly, we get closer to that every day.) Outside of that worst case scenario, I would argue that as our society gets more and more digital the younger generations are going to value a corresponding digital currency. They largely don't care about material things; they value experiences. And those experiences are going to increasingly be virtual as technology continues to progress. Obviously, CBDC could fill this need but then you have defeated the main tenet of BTC which is for it be decentralized and uncontrolled by a government. Adoption of CBDC is one of two last walls against total tyranny and unfortunately that is the likely outcome with digital currency.

BTC lasts forever in the sense that the number 7 lasts forever. It's just a concept. But is not likely that it's value will last forever. The entire reason people collected gold thousands of years ago is because they valued it just like we do today. There is basically 0% chance that people will stop valuing it anymore. In fact, gold is probably at it's lowest value right now since very little of it's demand is in the form of money. When fiat currencies die, then people will come back to it and the value will rise and then become quite stable at that new high point.
Quote:
Interesting idea. I want to say that has been tried at some point in history, but it failed. Maybe current tech could enable it.
We've only had the internet and smart phones for about 15 years. Where could it have been tried?


Was thinking about a more primitive attempt I think I read about. Pre-internet.
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In reply to YouBet • 12:58p, 11/5/23
AG
YouBet said:
aTmAg said:
YouBet said:
BTC also lasts forever assuming we aren't in a catastrophic, dystopian world where we have regressed to the stone age. (Frankly, we get closer to that every day.) Outside of that worst case scenario, I would argue that as our society gets more and more digital the younger generations are going to value a corresponding digital currency. They largely don't care about material things; they value experiences. And those experiences are going to increasingly be virtual as technology continues to progress. Obviously, CBDC could fill this need but then you have defeated the main tenet of BTC which is for it be decentralized and uncontrolled by a government. Adoption of CBDC is one of two last walls against total tyranny and unfortunately that is the likely outcome with digital currency.

BTC lasts forever in the sense that the number 7 lasts forever. It's just a concept. But is not likely that it's value will last forever. The entire reason people collected gold thousands of years ago is because they valued it just like we do today. There is basically 0% chance that people will stop valuing it anymore. In fact, gold is probably at it's lowest value right now since very little of it's demand is in the form of money. When fiat currencies die, then people will come back to it and the value will rise and then become quite stable at that new high point.
Quote:
Interesting idea. I want to say that has been tried at some point in history, but it failed. Maybe current tech could enable it.
We've only had the internet and smart phones for about 15 years. Where could it have been tried?


Was thinking about a more primitive attempt I think I read about. Pre-internet.
I'm only aware of attempts to use both gold and silver together. But the prices according to each would be fixed. So if the exchange rate of gold to dollar was set to $100/oz gold and $1/oz of silver, but the real value of gold was less than 100x of silver, then people would convert all their gold to dollars and then redeem that for silver. or vice versa. So the backing would pretty much always be one or the other.

My idea is to use many goods and to have the prices float to each other based on a computer algorithm that chases a percentage of each. So yeah, a unit of currency may not be able to buy as much gold today as it could yesterday, but as a whole, they could redeem the whole basket for the same amount. And the more it is diversified, the less susceptible the currency would be to spikes of individual items.

That's the idea at least.
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In reply to aTmAg • 1:25p, 11/5/23
2009, bitcoin was launched.

When did you first learn about it and where?
When did you download the bitcoin blockchain, being the ever curious software engineer?
How has your perspective shifted over time and what's been the most influential viewpoint that has affixed your perspective?

In my discussions with you I haven't seen an iota of movement, but maybe I'm misremembering.


In the above post you basically describe a version of a stable-coin or what BRICS is attempting to enact.

My issue with this is no different than my issue with CPI. Who's verifying the information reflects reality at any given moment. Who's proving the reserves?

Pretty sure I just figured it out:


It was Dave Ramsey that captured you, wasn't it?
What bitcoin’s detractors don’t understand is monetary economics, computer science, software engineering, network protocols, and electrical systems.

It ain't much, but it's honest Proof of Work.
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2:26p, 11/5/23
AG
Their basket includes a bunch of fiat currencies. The basket I'm talking about is physical goods.

And I first heard about bitcoin during that pizza thing. And google reports that was 2010. Who knows.. maybe I heard of it before you.


And again, just because people make money on something for a while doesn't mean it will last forever. People made lots of money from Madoff for decades before his house of cards fell. Then the people holding the bag lost everything. But until that day happened, they were making money hand over fist. The people who saw his scam for what it was were right the whole time. It's that the chickens didn't come home to roost yet.

While bitcoin is more of a mass-mistake than a scam, it's foundations are every bit as fragile.
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aggiepaintrain
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2:29p, 11/5/23
AG
We found the greater fools
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2:43p, 11/5/23
I mean, if we're really looking at things in that long-of-term to borrow a phrase from Fight Club... "on a long enough timeline, every company you buy stock in will bankrupt".
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2:50p, 11/5/23
When you realize that bitcoin is digital property with a limited supply, and understand the catalysts that are coming, including FASB accounting changes and the spot etf, you can understand how the price of bitcoin will continue to advance.

When more public companies buy bitcoin as a treasury reserve after seeing the impact its had on Microstrategy's stock price, you will wish you owned some.
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3:18p, 11/5/23
AG
Everything is in limited supply. Just because something is in limited supply doesn't mean it has value. There are more bitcoin than Theranos products ever produced. That doesn't mean buying either is a good idea.
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