BITCOIN as an alternative to regular currency

[jimibt]

Trump / Musk is obviously a +ve for BTC.

My view on how BTC will play out is that as a non yielding asset, its returns can only fall over time unless it goes exponential. So I don't think it will be abandoned, but may just loiter in the system for years to come gradually achieving a lower return over time.

the way I see it is that it will underpin other instruments and by proxy create its own additional value.

[firlandsfarm]

the way I see it is that it will underpin other instruments and by proxy create its own additional value.

I can't see where it has any value other than as a fashionable gimmick! No value has gone into Bitcoin. Bitcoins are acquired for free (other than the cost of mining but that goes to the manufacturers and the electricity suppliers).

[jimibt]

the way I see it is that it will underpin other instruments and by proxy create its own additional value.

I can't see where it has any value other than as a fashionable gimmick! No value has gone into Bitcoin. Bitcoins are acquired for free (other than the cost of mining but that goes to the manufacturers and the electricity suppliers).

i guess we can parallel it with the creation of paper money back in the 17th century where the note was really just a receipt for gold coin deposits. in short, our paper currency is really just a virtual concept also

[firlandsfarm]

the way I see it is that it will underpin other instruments and by proxy create its own additional value.

I can't see where it has any value other than as a fashionable gimmick! No value has gone into Bitcoin. Bitcoins are acquired for free (other than the cost of mining but that goes to the manufacturers and the electricity suppliers).

i guess we can parallel it with the creation of paper money back in the 17th century where the note was really just a receipt for gold coin deposits. in short, our paper currency is really just a virtual concept also

Not really, as you say it was a receipt for a deposit ... with Bitcoin nothing is deposited.

[jimibt]

I can't see where it has any value other than as a fashionable gimmick! No value has gone into Bitcoin. Bitcoins are acquired for free (other than the cost of mining but that goes to the manufacturers and the electricity suppliers).

i guess we can parallel it with the creation of paper money back in the 17th century where the note was really just a receipt for gold coin deposits. in short, our paper currency is really just a virtual concept also

Not really, as you say it was a receipt for a deposit ... with Bitcoin nothing is deposited.

there's an argument that Bitcoin can act as a "digital gold," serving as a hedge against inflation and economic instability. its limited supply (capped at 21 million coins) can make it a scarce asset (despite being a stream of electons - oh wait, what properties does gold present - lol).

who knows what our descendants will make of our current scepticism

[edit] - further thoughts:

Gold: Tangible, historically valuable, and considered a stable store of value.
Bitcoin: Digital, modern, and potentially revolutionary but highly volatile.

Co-pilot chucked this out:
Both have their unique advantages and risks. Gold's value is rooted in its physical properties and historical significance, while Bitcoin's value is driven by technological innovation and its potential to disrupt traditional financial systems.

Physical vs. Digital: Gold's scarcity is tied to its physical presence and the challenges of extraction. Bitcoin's scarcity is a result of its digital design and the rules set by its protocol.
Market Impact: Both assets' scarcity contributes to their value. However, Bitcoin's fixed supply and predictable issuance schedule can make it more appealing to those who value certainty in scarcity.

[Euler]

It's only limited in terms of that's what people want it to be. You could create derivatives or modification that no longer make it directly limited.

[megarain]

Everyone has a view etc.

But if I had decided to hold 5% of wealth in Gold, I cant see any argument that you shouldnt hold 5% of weath in BTC.

I know which asset I would rather have, if I had to move money at short notice, thru borders.

[Euler]

Everyone has a view etc.

But if I had decided to hold 5% of wealth in Gold, I cant see any argument that you shouldnt hold 5% of weath in BTC.

I know which asset I would rather have, if I had to move money at short notice, thru borders.

Gold has interchangeable value. If the markets shut tomorrow you could still use gold. But you still can't really use BTC for anything other than speculation, especially if the markets shut.

[jimibt]

Everyone has a view etc.

But if I had decided to hold 5% of wealth in Gold, I cant see any argument that you shouldnt hold 5% of weath in BTC.

I know which asset I would rather have, if I had to move money at short notice, thru borders.

Gold has interchangeable value. If the markets shut tomorrow you could still use gold. But you still can't really use BTC for anything other than speculation, especially if the markets shut.

would the value of gold (AU) not be severely diminished also, given that it would no longer be traded??

[Euler]

I should have seen the Trump / Musk bounce.

Trump winning was pretty predicatble, but I just didn't think through how that could play out in Crypto.

[Euler]

Everyone has a view etc.

But if I had decided to hold 5% of wealth in Gold, I cant see any argument that you shouldnt hold 5% of weath in BTC.

I know which asset I would rather have, if I had to move money at short notice, thru borders.

Gold has interchangeable value. If the markets shut tomorrow you could still use gold. But you still can't really use BTC for anything other than speculation, especially if the markets shut.

would the value of gold (AU) not be severely diminished also, given that it would no longer be traded??

When I last looked there was more Gold traded and held on reverse than there was actual Gold mined. So there is a bit of a float out there.

This is why I think the same thing will happen to BTC, but on a grander scale. The theory of a limit isn't reality.

[jimibt]

Gold has interchangeable value. If the markets shut tomorrow you could still use gold. But you still can't really use BTC for anything other than speculation, especially if the markets shut.

would the value of gold (AU) not be severely diminished also, given that it would no longer be traded??

When I last looked there was more Gold traded and held on reverse than there was actual Gold mined. So there is a bit of a float out there.

This is why I think the same thing will happen to BTC, but on a grander scale. The theory of a limit isn't reality.

while it is technically possible to change the 21 million limit, i think the practical and social barriers make it extremely unlikely. the fixed supply is a cornerstone of bitcoin's value proposition, and altering it would require overcoming substantial resistance from the community. but, never say never, tho prolly not in my lifetime

[Euler]

Just create an ETF and hey presto, you have magically expanded the quantity of all traded BTC.

There isn't an obligation for a derivative to actually hold the underlying asset.

[jimibt]

Just create an ETF and hey presto, you have magically expanded the quantity of all traded BTC.

There isn't an obligation for a derivative to actually hold the underlying asset.

yeah, but, while derivatives do not require holding the underlying asset, their value is closely tied to the performance and perception of the asset in the broader market. in short, there would still be an alignment in price between bitcoin derivatives and the bitcoin market.

[edit] - another thought re *if markets closed*. bitcoin is of course used for a multitude of transactions across the board and isn't just a traded entity, so unless the internet were to cease and all other form of comms, then i think it would do just fine as it was.

[Euler]

Just create an ETF and hey presto, you have magically expanded the quantity of all traded BTC.

There isn't an obligation for a derivative to actually hold the underlying asset.

yeah, but, while derivatives do not require holding the underlying asset, their value is closely tied to the performance and perception of the asset in the broader market. in short, there would still be an alignment in price between bitcoin derivatives and the bitcoin market.

In theory.

The problem with BTC is that's it's not tied to anything, it's impossible to work out it's true value.