Of course, we have all kind of things going on in bitcoin at the same time in terms of what makes it useful and what makes it valuable and what kinds of liquidation avenues exists (and what kinds of onboarding ways exist). The mere fact that guys might not be searching ways to buy coffee with their bitcoin does not automatically translate into their ONLY "speculating" bullshit dichotomy that you suggested in terms of SCAM and inferences towards those other various dumbass talking points that we heard from the bigblocker nutjobs in 2017 and we hear them repeated from time to time.
The argument that Bitcoin should be used as money is sound. It does not logically lead to the conclusion that we should blow up the blocksize—a non-scaling non-solution which would wreck Bitcoin, like taking cyanide to cure a headache. Strawmanning me with bigblockers is rather unjustified, don’t you think. Do you do the same to Bitrefill, or to the people who build Lightning checkout terminals for literal purchases of cups of coffee?
I redouble what I said: A thing that exists only for the purpose of trying to resell it for a higher price is a
SCAM and a textbook Ponzi scheme. If you try to contradict and rebut that, you are inviting that your arguments be used and quoted to shill for thousands of worthless shitcoins in WO.
I did mention in an earlier post that
I have a “cordial contempt” for anyone who buys into Bitcoin only to seek a profit—for “ONLY speculating”, as you put it here. (See end of linked post.) I explained why. I absolutely stand by my words there.
[...] like a stock (which is perhaps only part of the story or a temporary status for whatever that bitcoiners might be doing and uie-pooie don't like it) .
Bitcoin is NOT A STOCK, it is NOTHING LIKE A STOCK, and I will rain hellfire on any suggestions that treating it like a stock is somehow acceptable behaviour. I have an absolute, no-compromise, non-negotiable zero-tolerance policy for mistreating Bitcoin as if it’s a quasi-stock.You misunderstood my point about that.
Want to buy and hold Bitcoin as a speculative investment in a deflationary
currency? Fine. HODL.
Want to trade Bitcoin for profit? Fine. Have fun trading high-volatility
forex. Indeed, BTC should be a delight to pro forex traders who get bored with chasing a few bps on the EUR/USD pair, or whatever.
Bitcoin is money, i.e., a currency. A stock is not a currency. A stock is nothing like a currency. And in altcoinland, I have recently experienced up-close what happens when people treat an alleged “cryptocurrency” like a stock: Fungibility gets broken, investors with losses demand some sort of a refund (!) based on how much they paid (!!), and greed-blinded scammers throw the door wide open for
securities regulators to crack down on their
illegal unregistered securities scheme.
Your tolerance of thinking of Bitcoin like a stock will lead to:
- 1 BTC ≠ 1 BTC. People who bought BTC for $67,000 will demand special rights and higher equity—because they paid-in a capital contribution larger than people who bought BTC for $200, or for $0.01, or for pizza at a notional rate of 0.0002 unit pizzas per 1 BTC. They will complain that it’s unfair that they paid literally >26,000,000x more for BTC than some other people paid for BTC. Unfair! Think it can’t happen? That is exactly what happened in Terra, where it was deemed “unfair” that some people paid $100 for LUNA, and others paid $0.000003 for LUNA—all in fair-market trades. (Bitcoiner honesty: “A trade happens because both parties think they’re getting a good deal.” — Laszlo Hanyecz.)
- Regulation as a security. Existing laws not only allow, but require securities regulators to regulate stocks. This includes anything that behaves like a stock, on grounds of “looks like a duck, walks like a duck, quacks like a duck”. Some altcoins, some ICOs, and some of the weirder NFT projects have gotten in trouble on such grounds. And if Bitcoin, a decentralized system with no boss, gets infected with the brain-damage of treating BTC like a stock, then there is no way to stop people from corrupting it so that BTC really behaves like a stock.
- Shareholder rights. People who own shares of stock have rights accorded by law and custom. People who buy BTC in the belief that it’s “like a stock” will naturally start to demand those types of rights.
- This list could be continued. I think I’ve made my point.
Bitcoin is now a topic of mass-media headlines. It is attracting buyers who have
no idea what it is. I have spoken to people both online and IRL who are just now getting curious about Bitcoin—curious enough to be interested in buying BTC. Not infrequently, their uncomprehending search for a familiar analogy leads them to: “So, Bitcoin is sort of like a stock.” That is innocent ignorance, but it is dangerous ignorance: Dangerous to them (it’s a great way to lose money!), and even more dangerous to Bitcoin. It must be corrected—kindly corrected, in the many cases of good-faith confusion, but corrected firmly nevertheless.
As a longtime Bitcoiner, I have a duty to Bitcoin to help keep it healthy by educating the clueless newbies:
Bitcoin is absolutely nothing like a stock. Bitcoin is a currency. The correct analogy: Buying BTC is like exchanging your USD to EUR, JPY, etc.
This means, among other things:
- When you buy BTC, your paid-in equity is zero.
- You are not making a capital contribution to an enterprise.
- Accordingly, Bitcoin has no memory of what you paid for it.
- When you “buy BTC”, you are exchanging one currency to another. Your then hold that currency, and your holding is denominated exclusively in that currency: 1 BTC = 1 BTC. “1 BTC” has no dollar equivalent, no dollar value—except for the freely-floating market exchange rate of an independent currency, Bitcoin, trading against the dollar.
- By analogy, if you exchange your USD to EUR, the ECB does not keep track of how many dollars you paid-in to their system. You did not make a capital contribution to Europe—not in the sense of purchasing an equity stake in an enterprise. You swapped one currency for another. You now hold hold EUR, not USD. EUR does not have a dollar-denominated value: The value of EUR is denominated in EUR: 1 EUR = 1 EUR. That is easy to understand, and it is nothing like investing in a stock.
These are not nitpicks, and not idle theories. They are issues both of profound principle, and of grave practical import. Observe my use here of some terminology that has precise, highly significant legal meanings.
We know that Bitcoin is multi-faceted in its use cases. We know that there is a lot of why not both..
Bitcoin has many use cases. Treating it like a stock is NOT one of them, but it does have many use cases.
Medium of exchange—store of value—sure, why not both. However, the cart cannot come before the horse. Bitcoin’s utility as a medium of exchange is an intrinsic, inseparable part of what gives it the fundamental value that makes it a good store of value. It is not a tangible pretty thing like gold, so its
only fundamental value is its nature as a superior form of money.
I should not even need to be responding to any pints that I made, but hey.. I am willing to entertain matters to some extent including to point out that we know that Gresham's law exists too, along the side of at least 7 network effects that are still building in connection with bitcoin and are at various stages of their growth as well as that some of those same network effects build upon others, snowballing and feedback loops..
All of those theories about Gresham’s Law and network effects stand on my premise that
Bitcoin is money. Not a stock. Definitely not a Ponzi that exists only for resale to the greater fool.
I’m not sure why you are arguing with my premise, when it is a prerequisite for your conclusions.
Furthermore, in the spirit of Gresham's law, if we already can appreciate that Bitcoin is the best of moneys, why would we want to spend it first (as I already referred to that)?..
I did hint that “go out and spend your coins!” is, in itself, not exactly the best financial advice. I myself hate to spend my BTC savings; if possible, I prefer to use Bitcoin as a payment rail, sort of like my own personal version of Strike. When that is not a practical option (as it often is not), I have developed over the years some methods of personal finance accounting that help me to reduce or avoid the negative effect of spending my BTC—in essence, ways of managing currency exchange risk when I hold an
extremely volatile currency.
Since I keep my primary savings in BTC, aversion to spending BTC is a part of how I got in trouble with debt. A few months ago, I tried settling some BTC-spending transactions by borrowing dollars against BTC, using the dollars to buy BTC, and then immediately spending what was effectually margin-buy BTC. I thought it was a clever way to avoid spending my BTC—
and to avoid exchange rate risk, since I was essentially doing an unprofitable arbitrage trade on margin. Needless to say, this use of debt turned out to be a
very bad idea (although doing similarly with fiat cash would probably be wise).
Much though I loathe spending my own BTC, I also actively seek to
use BTC as money—to use it one of my most preferred payment methods, and to support vendors who accept BTC. The effort and the unfortunate risks that I have taken to reconcile these two conflicting goals shows, at least, that I put my money where my mouth is.
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