Take a look at the fundamentals though. Bitcoin is a decentralized, static supply currency. It has consumer confidence because it cannot be inflated unlike the USD. It is similar to gold in that regard. And it wasn't too long ago America was on a gold standard. I'm not saying the USD will be worthless in the near future, but I do understand that bitcoin is serving as a crypto-gold sort of speak. And you are right, its success is reliant on consumer confidence, just as the USD. I'd say it is riskier since it is a relatively new currency, but worth while investing a small portion of your portfolio. Again, its key attraction is its decentralization from any country's economy and its static supply not allowing for its depreciation in that regard.
I know the selling points, but at the end of the day it is still useless. Not only is it useless, it depends on electricity (energy) to be used in the first place. The GDP of an economy is directly correlated to an economy’s energy consumption. Thus, whatever you can purchase a lot of energy with, will be of value. America has a lot of energy at the moment, and historically was the most dominate oil producer. Over time that role has lessened, but oil needs to be transported by ship around the globe… Thus the strongest Navy is still extremely valuable… Who has the strongest Navy at the moment? The USA. So whatever the Americans decide will be their main currency will be the world reserve currency for the foreseeable future until either the method of energy production changes with new technology and/or major world wars are fought and empires fall leaving the American Navy crippled and shipping lanes controlled by other governments.
For now America is in control and everyone else just has to suck it… If America prints, then it prints… That can lead to world economic instability, but it is what it is… In the future though, I suspect America will incorporate Canada into the fold. Canada needs America to develop their resources and to protect them from outside conquest, and America needs that sweet sweet energy to stay dominate.
I take a positive outlook on America's future. I hope we have energy independence and end the endless wars in the middle east. I hope bitcoin and the USD can coexist. I figure if the USD fails so does bitcoin. May as well diversify a bit in the case that bitcoin outpaces the USD.
I like this view. People are either too skeptical or too bullish on bitcoin. It is like any commodity. It will grow over time. People trusting the stock market but not btc is irrational. On the flip side, it is very likely a hype right now that is overvaluing its price right now, so best not to go all in. A few hundred dollars wouldn't hurt most people to invest in bitcoin.
Very true, it’s like the idea of investing in gold, gold has been a sold way to back up currency for thousands of years, nowadays with paper money and not so precious metals (Copper and zinc Being examples think pennies). But it’s still good to invest in gold because it will always have value that will go up and down. The same concepts can be taken for bitcoin or other cryptocurrency’s as well in the stock market, there’s a reason why there’s a saying don’t put your eggs in one basket, that saying applies to the financial market. Oh and maybe Invest in Dr. Seuss books, If I ran the zoo is currently going for $499 a couple days ago it was running at 1500 because dr. Seuss publishing said they were not going to publish the books anymore so basically they got canceled. Invest in the rest of Dr. Seuss’s books before they get canceled and he might be able to make a profit off of them if not then when you have kids you can read them to your children.
TY for MHA
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I am somewhere on the fence with BTC. I think it has great long term potential as we move towards blockchain technology. Hopefully, the awful democrats don't destroy our economy post covid. The massive printing of money is a bad sign already of inflation like you said, but since America is in the driver seat with the USD being the reserce currency, I am hopeful the USD does not fail. I expect long term growth for bitcoin, but many dips along the way as people panic sell and corporations buy back and forth between each other.
It might be a pump and dump. But I'd say its worth the opportunity cost to at least up in a small portion of your portfolio. It isn't any different from investing on Wallstreet, and people seem to take legitimacy of that even though it is a casino for the fat cats and lobbyists.
It's all fiat. Gold, silver, bitcoin, and paper money all are valuable because there is confidence in them. Bitcoin's fundamentals give it worth because people value a decentralized currency and uninflatable supply of currency. This is very much the same as gold or silver. You can argue gold and silver have physical properties that make them useful. But if people decide gold and silver not to be useful anymore, they would become worthless. So it is a gross oversimplification to say something has or has no inherent worth.
Gold and silver are both used industrially. Thus you are wrong.
My point is gold and silver are useful, so is bitcoin. It is an uninflatable monetary supply that is decentralized and can never be removed from the blockchain. Gold and silver can become useless if they no longer have industrial uses. Bitcoin can become useless if the internet and blockchain no longer exists. The point is, they are all have worth at the moment, and it is very unlikely they will become worthless anytime soon.
Gold and silver can be used to create something tangible. Bitcoin can't. So no, the three aren't identical.
So to be valuable something has to be tangible? Why is paper money valuable then?
It isn't anymore since it isn't connected to anything tangible thanks to Nixon who effectively abolished the gold standard worldwide.It essentially only runs on trust that the printed paper is worth something. The moment that trust vanishes, the house of cards will collapse.
I get your point, but the same could easily be applied to gold and silver. If their industrial use is gone, their value is nothing. I suppose you could argue that it is more likely for fiat currencies like USD and bitcoin to fail than tangible commodities like gold and silver to fail.
The difference is that gold and silver DO have a tangible usage. Bitcoin and papermoney do NOT. This is simply not comparable and thus bitcoin isn't a reserve currency. In fact, Bitcoin is more like paper money than it is like gold and silver as both Bitcoins and paper money have no tangible use at all.I don't know what is there to argue. You can argue that Bitcoin may be an interesting replacement to paper money. It may or may not be depending on what arguments being prioritised. But to compare it to gold and silver is simply wrong.
The argument for bitcoin suitability for a reserve currency is its two key features: decentralization and a fixed supply so it is uninflatable. This is the same reason that gold was chosen to be the reserve to which the USD was pegged to. The primary reason was not that gold was useful industrially; that is a perk of gold, but not the main reason it was chosen to be the reserve. It was chosen because the supply was relatively fixed and decentralized.