Be your own bank: Why Bitcoin is the most valuable cryptocurrency

[687_2]

Let's look at Bitcoin for what it is: a fundamental human efficiency improvement.

Here's why it's valuable (value != price):
- The software and rules can't be changed easily or quickly. It takes years and a lot of global perspectives. Maybe they can't be changed at all.
- Therefore, it works exactly as expected: 24/7/365
- It's accessible anywhere in the world: 24/7/365
- It's accessible by everyone in the world who has a computer and internet connection

Because of these reasons we can say that XBT is stable and predictable. We already see how on many exchanges, XBT is being used as a base "currency" that all other cryptocurrencies are denominated in.

And because it's stable and predictable, it acts as an *international settlement system*, and therefore can also act as a global reserve currency. Currently, the incumbent settlement system (National central banks acting as clearing systems between commercial banks) is the only way the global economy can function. For some perspective, consider that financial activity consumes about 1/3 of the world's economic productivity (~USD30 trillion).

What about technologies that are Turing complete, more technically advanced, etc.?
- When we consider Bitcoin's primary function to be a global reserve currency and settlement system, these features are at best irrelevant.

But the transaction fees are killing me!
- Many cryptocurrency users recognize the financial and human costs of ledger transparency and mutability in the existing financial system, but didn't realize that the cost of immutability in a cryptocurrency could be the same or higher. Consider that correspondent banking is complex and costly, but those costs are absorbed by everyone who participates in the financial system (mostly taxpayers). At the moment Bitcoin users subsidize the current financial system through their taxes while also incurring the costs of their Bitcoin transactions, so the pain is naturally doubled. Users in different countries will also experience different transaction cost pain points, and some people will leave in search of something else to buy their coffee with. Sorry, there's no such thing as a free lunch, and billionaires that have been paying thousands to keep their transactions private in the existing banking system have no problem outbidding you on your next transfer, and in fact will likely have more trust in Bitcoin as the cost of using it increases. User behavior will update accordingly, and people will really "become their own bank".

Ethereum/Ripple/Dogecoin is overtaking Bitcoin's marketshare!
- XRP, ETH, etc. are tantalizing to banks, governments, and speculators. But they will only ever "experiment" with these things in order to generate PR and appear clever to their stakeholders. They know that these systems are not stable enough for production, and that's why there are no examples of anyone going "live" with the thing they built on their forked Ethereum blockchain. Cryptocurrency "Marketshare" is a buzzword concept created by speculators and marketers, who have no idea what the things they are buying right now are worth.

[hatshepsut93]

And because it's stable and predictable, it acts as an *international settlement system*,

Bitcoin is neither stable, nor predictable, if it's less volatile than altcoins, it doesn't mean that it's price isn't the problem for people who want to use it as a currency. Of course Bitcoin is very likely to grow in long term, but short term value is very important for a currency, you don't want to receive something that is likely to lose 5-10% of its value at any moment.

But the transaction fees are killing me!
- Many cryptocurrency users recognize the financial and human costs of ledger transparency and mutability in the existing financial system, but didn't realize that the cost of immutability in a cryptocurrency could be the same or higher. Consider that correspondent banking is complex and costly, but those costs are absorbed by everyone who participates in the financial system (mostly taxpayers). At the moment Bitcoin users subsidize the current financial system through their taxes while also incurring the costs of their Bitcoin transactions, so the pain is naturally doubled. Users in different countries will also experience different transaction cost pain points, and some people will leave in search of something else to buy their coffee with. Sorry, there's no such thing as a free lunch, and billionaires that have been paying thousands to keep their transactions private in the existing banking system have no problem outbidding you on your next transfer, and in fact will likely have more trust in Bitcoin as the cost of using it increases. User behavior will update accordingly, and people will really "become their own bank".

Immutability is worth the price only when you really need it, otherwise you are just burning your money (and a lot of money) when you "buy your coffee" with Bitcoin. Right now transaction fees are so high that Bitcoin can't be considered a currency, but instead it should be called an asset, "digital gold", "immutable storage of value", etc.

[bitart]

And because it's stable and predictable, it acts as an *international settlement system*,

Bitcoin is neither stable, nor predictable, if it's less volatile than altcoins, it doesn't mean that it's price isn't the problem for people who want to use it as a currency. Of course Bitcoin is very likely to grow in long term, but short term value is very important for a currency, you don't want to receive something that is likely to lose 5-10% of its value at any moment.

But the transaction fees are killing me!
- Many cryptocurrency users recognize the financial and human costs of ledger transparency and mutability in the existing financial system, but didn't realize that the cost of immutability in a cryptocurrency could be the same or higher. Consider that correspondent banking is complex and costly, but those costs are absorbed by everyone who participates in the financial system (mostly taxpayers). At the moment Bitcoin users subsidize the current financial system through their taxes while also incurring the costs of their Bitcoin transactions, so the pain is naturally doubled. Users in different countries will also experience different transaction cost pain points, and some people will leave in search of something else to buy their coffee with. Sorry, there's no such thing as a free lunch, and billionaires that have been paying thousands to keep their transactions private in the existing banking system have no problem outbidding you on your next transfer, and in fact will likely have more trust in Bitcoin as the cost of using it increases. User behavior will update accordingly, and people will really "become their own bank".

Immutability is worth the price only when you really need it, otherwise you are just burning your money (and a lot of money) when you "buy your coffee" with Bitcoin. Right now transaction fees are so high that Bitcoin can't be considered a currency, but instead it should be called an asset, "digital gold", "immutable storage of value", etc.

It is really a waste of money now to use bitcoin to purchase everyday goods (if you haven't got the equivalent income in bitcoin monthly). I had used my bitcoin debit card frequently some years ago to buy a coke for 1 EUR, and I have paid with bitcoin. That time the price of bitcoin was about $300. Last week when the price of bitcoin nearly reached $3000, I had thought it over again, the coke was 10 EUR... I won't buy now anything for bitcoin, only in case of a real need...

[chennan]

And because it's stable and predictable, it acts as an *international settlement system*,

Bitcoin is neither stable, nor predictable, if it's less volatile than altcoins, it doesn't mean that it's price isn't the problem for people who want to use it as a currency. Of course Bitcoin is very likely to grow in long term, but short term value is very important for a currency, you don't want to receive something that is likely to lose 5-10% of its value at any moment.

But the transaction fees are killing me!
- Many cryptocurrency users recognize the financial and human costs of ledger transparency and mutability in the existing financial system, but didn't realize that the cost of immutability in a cryptocurrency could be the same or higher. Consider that correspondent banking is complex and costly, but those costs are absorbed by everyone who participates in the financial system (mostly taxpayers). At the moment Bitcoin users subsidize the current financial system through their taxes while also incurring the costs of their Bitcoin transactions, so the pain is naturally doubled. Users in different countries will also experience different transaction cost pain points, and some people will leave in search of something else to buy their coffee with. Sorry, there's no such thing as a free lunch, and billionaires that have been paying thousands to keep their transactions private in the existing banking system have no problem outbidding you on your next transfer, and in fact will likely have more trust in Bitcoin as the cost of using it increases. User behavior will update accordingly, and people will really "become their own bank".

Immutability is worth the price only when you really need it, otherwise you are just burning your money (and a lot of money) when you "buy your coffee" with Bitcoin. Right now transaction fees are so high that Bitcoin can't be considered a currency, but instead it should be called an asset, "digital gold", "immutable storage of value", etc.

Totally agree, but you are forgetting one more really really important thing that Bitcoin lacks to make it a true currency; and that is the mere fact that peoples addresses can be targeted and Bitcoins can be "tainted".  This will always make it extremely tough to prevent exchanges to censor one person's Bitcoin over another person's Bitcoin, and a true currency doesn't do that.

I know there are things such as mixers and the ability to use multiple addresses, but all in all it doesn't matter.  If you give me your bank deposit number and I have the ability to see where, when, and to whom you've sent money too; you wouldn't be too happy with that "private store of wealth".

[Iranus]

But the transaction fees are killing me!
- Many cryptocurrency users recognize the financial and human costs of ledger transparency and mutability in the existing financial system, but didn't realize that the cost of immutability in a cryptocurrency could be the same or higher.

Immutable cryptocurrencies can be easily developed which are not Bitcoin.  It's true that Bitcoin has a "brand" and public standing, but this is not necessarily sustainable.

New tech being developed does compromise immutability/stability, but:

1.  You only have to know that the currency you're using for the payment is safe for the amount of time you spend doing the transaction.
2.  Bitcoin is not 100% immutable, hence UASF/UAHF/BU/SegWit etc.
3.  Any other cryptocurrency could reach that standing while not being limited in the same way that Bitcoin is, or be exactly the same as Bitcoin and just be used because it has no/low fees at the time of use.

Ethereum/Ripple/Dogecoin is overtaking Bitcoin's marketshare!
- XRP, ETH, etc. are tantalizing to banks, governments, and speculators. But they will only ever "experiment" with these things in order to generate PR and appear clever to their stakeholders. They know that these systems are not stable enough for production, and that's why there are no examples of anyone going "live" with the thing they built on their forked Ethereum blockchain. Cryptocurrency "Marketshare" is a buzzword concept created by speculators and marketers, who have no idea what the things they are buying right now are worth.

Yeah, I pretty much agree with this.  ETH have got something but it's been overplayed.  ETC makes more sense.

[ozaeri]

Let's look at Bitcoin for what it is: a fundamental human efficiency improvement.

For some perspective, consider that financial activity consumes about 1/3 of the world's economic productivity (~USD30 trillion).

This is the quote I have the most issue with. You sort of compare what bitcoin can do by looking at total financial activity. Assuming your numbers are correct, they would account for things like bond purchases and loans whereas bitcoin can only properly compete with the deposit side of th equation.

People suggesting be your own bank with bitcoin forget that a bank is more than just a place to deposit money, its a place to get loans and access other forms of financial activity that bitcoin cannot or at least does not currently do.

[Yakamoto]

Let's look at Bitcoin for what it is: a fundamental human efficiency improvement.

Here's why it's valuable (value != price):
- The software and rules can't be changed easily or quickly. It takes years and a lot of global perspectives. Maybe they can't be changed at all.
- Therefore, it works exactly as expected: 24/7/365
- It's accessible anywhere in the world: 24/7/365
- It's accessible by everyone in the world who has a computer and internet connection

Because of these reasons we can say that XBT is stable and predictable. We already see how on many exchanges, XBT is being used as a base "currency" that all other cryptocurrencies are denominated in.

And because it's stable and predictable, it acts as an *international settlement system*, and therefore can also act as a global reserve currency. Currently, the incumbent settlement system (National central banks acting as clearing systems between commercial banks) is the only way the global economy can function. For some perspective, consider that financial activity consumes about 1/3 of the world's economic productivity (~USD30 trillion).

What about technologies that are Turing complete, more technically advanced, etc.?
- When we consider Bitcoin's primary function to be a global reserve currency and settlement system, these features are at best irrelevant.

But the transaction fees are killing me!
- Many cryptocurrency users recognize the financial and human costs of ledger transparency and mutability in the existing financial system, but didn't realize that the cost of immutability in a cryptocurrency could be the same or higher. Consider that correspondent banking is complex and costly, but those costs are absorbed by everyone who participates in the financial system (mostly taxpayers). At the moment Bitcoin users subsidize the current financial system through their taxes while also incurring the costs of their Bitcoin transactions, so the pain is naturally doubled. Users in different countries will also experience different transaction cost pain points, and some people will leave in search of something else to buy their coffee with. Sorry, there's no such thing as a free lunch, and billionaires that have been paying thousands to keep their transactions private in the existing banking system have no problem outbidding you on your next transfer, and in fact will likely have more trust in Bitcoin as the cost of using it increases. User behavior will update accordingly, and people will really "become their own bank".

Ethereum/Ripple/Dogecoin is overtaking Bitcoin's marketshare!
- XRP, ETH, etc. are tantalizing to banks, governments, and speculators. But they will only ever "experiment" with these things in order to generate PR and appear clever to their stakeholders. They know that these systems are not stable enough for production, and that's why there are no examples of anyone going "live" with the thing they built on their forked Ethereum blockchain. Cryptocurrency "Marketshare" is a buzzword concept created by speculators and marketers, who have no idea what the things they are buying right now are worth.

I'm just going to touch on the points I bolded if you have no issues with that.

I don't believe that Bitcoin in its current state is anything close to predictable or stable when it comes to measuring up as a currency, but it is definitely secure when it comes to international trade. I don't know if it is really able to be anything close to a global reserve currency yet, however in the future it might be something to take note on. It would be interesting to see the $30T evaporate from economic activity due to Bitcoin becoming the most prominent medium, however.

I think that you bring up an interesting point about alts but you do miss the point that even though they are more centralized, they do pose an interesting medium (especially Ethereum) for performing different business-related transactions. They're not something to scoff at but they're not irrelevant either. They are more tantalizing to investors, but that can mean a lot.

[chennan]

-snip-

I'm just going to touch on the points I bolded if you have no issues with that.

I don't believe that Bitcoin in its current state is anything close to predictable or stable when it comes to measuring up as a currency, but it is definitely secure when it comes to international trade. I don't know if it is really able to be anything close to a global reserve currency yet, however in the future it might be something to take note on. It would be interesting to see the $30T evaporate from economic activity due to Bitcoin becoming the most prominent medium, however.

I think that you bring up an interesting point about alts but you do miss the point that even though they are more centralized, they do pose an interesting medium (especially Ethereum) for performing different business-related transactions. They're not something to scoff at but they're not irrelevant either. They are more tantalizing to investors, but that can mean a lot.

I'm curious as to how you think alts are "centralized" by default?  Especially compared to Bitcoin, where miners have obviously become more centralized than ever.  We are currently seeing miners right now have a war of blocksize ideology as I type.

I do agree though that alts do bring more to the table and allows people more freedom to try stuff theirselves, rather than just wait for the all might bitcoin core team to fork or do something that helps fix any problem whatsoever.

[Love!]

It is really a waste of money now to use bitcoin to purchase everyday goods (if you haven't got the equivalent income in bitcoin monthly). I had used my bitcoin debit card frequently some years ago to buy a coke for 1 EUR, and I have paid with bitcoin. That time the price of bitcoin was about $300. Last week when the price of bitcoin nearly reached $3000, I had thought it over again, the coke was 10 EUR... I won't buy now anything for bitcoin, only in case of a real need...

....Or for an item whose value goes up in time. Collectibles, antiques, etc...

If the projected rise in value over the next, say, 3 years exceeds the transaction fee's, it will end up being worth it.

[Kyraishi]

Bitcoin might not be the best cryptocurrency out there, in fact I would say that Ethereum etc. are all better than bitcoin on the technical side, but bitcoin was what started it all out. Without bitcoin there aren't any altcoins. I agree completely with you that the fact that altcoin creators usually only use their tokens to generate profit for themselves through a crowdsale. Many of these functions are not actually needed. Bitcoin provides enough functionality for it to work and for transactions to work flawlessly.

However, one of your points was that bitcoin software cannot be changed easily. This currently stands true right now but may change in the near future. A hard fork could happen, and network rules will change. It'll all depend on how things pan on in the next few months imo, and what happens next will be a decider on whether BTC is successful or not.

[Makka]

And because it's stable and predictable, it acts as an *international settlement system*,

Bitcoin is neither stable, nor predictable, if it's less volatile than altcoins, it doesn't mean that it's price isn't the problem for people who want to use it as a currency. Of course Bitcoin is very likely to grow in long term, but short term value is very important for a currency, you don't want to receive something that is likely to lose 5-10% of its value at any moment.

But the transaction fees are killing me!
- Many cryptocurrency users recognize the financial and human costs of ledger transparency and mutability in the existing financial system, but didn't realize that the cost of immutability in a cryptocurrency could be the same or higher. Consider that correspondent banking is complex and costly, but those costs are absorbed by everyone who participates in the financial system (mostly taxpayers). At the moment Bitcoin users subsidize the current financial system through their taxes while also incurring the costs of their Bitcoin transactions, so the pain is naturally doubled. Users in different countries will also experience different transaction cost pain points, and some people will leave in search of something else to buy their coffee with. Sorry, there's no such thing as a free lunch, and billionaires that have been paying thousands to keep their transactions private in the existing banking system have no problem outbidding you on your next transfer, and in fact will likely have more trust in Bitcoin as the cost of using it increases. User behavior will update accordingly, and people will really "become their own bank".

Immutability is worth the price only when you really need it, otherwise you are just burning your money (and a lot of money) when you "buy your coffee" with Bitcoin. Right now transaction fees are so high that Bitcoin can't be considered a currency, but instead it should be called an asset, "digital gold", "immutable storage of value", etc.

I agree. These days when the price of bitcoin is high, transaction fees have also gone higher. It is impractical to use bitcoin for day to day purchases. But, of course, bitcoin is still a currency, a virtual one. However, it would be best to use bitcoin only when the real need arises. What now? Bitcoin is best used as an investment. Instead of wasting a great deal of money through transaction fees, we better earn additional income by holding on to it and selling it when its value goes higher.

[Yakamoto]

-snip-

I'm just going to touch on the points I bolded if you have no issues with that.

I don't believe that Bitcoin in its current state is anything close to predictable or stable when it comes to measuring up as a currency, but it is definitely secure when it comes to international trade. I don't know if it is really able to be anything close to a global reserve currency yet, however in the future it might be something to take note on. It would be interesting to see the $30T evaporate from economic activity due to Bitcoin becoming the most prominent medium, however.

I think that you bring up an interesting point about alts but you do miss the point that even though they are more centralized, they do pose an interesting medium (especially Ethereum) for performing different business-related transactions. They're not something to scoff at but they're not irrelevant either. They are more tantalizing to investors, but that can mean a lot.

I'm curious as to how you think alts are "centralized" by default?  Especially compared to Bitcoin, where miners have obviously become more centralized than ever.  We are currently seeing miners right now have a war of blocksize ideology as I type.

I do agree though that alts do bring more to the table and allows people more freedom to try stuff theirselves, rather than just wait for the all might bitcoin core team to fork or do something that helps fix any problem whatsoever.

I don't believe that most alts are centralized by default, but Ethereum is a very centralized platform compared to a majority of other altcoins. That's more or less what I'm referencing, and it is less about alts in general. The dev team for ETH is basically the only one and they're very active when it comes to developing their crypto, and that is a good thing as it ensures there is a constant better quality of product, but it does generate some discontent with the freedom-heavy side of the community.

Yes, there is mining power that is centralized compared to other cryptos, and I find that to be an issue, but it's more just the dev team I'm referencing (think BU or Core had complete control). Anyone can become a miner (with a large investment) and have their own say, you can't be a dev team and get a vote.

Glad to see that you also saw my last point how other alts allow for a larger variety of concepts to be presented. Most people tunnel-vision on one point.

[Vohoanghiep111]

Let's look at Bitcoin for what it is: a fundamental human efficiency improvement.

Here's why it's valuable (value != price):
- The software and rules can't be changed easily or quickly. It takes years and a lot of global perspectives. Maybe they can't be changed at all.
- Therefore, it works exactly as expected: 24/7/365
- It's accessible anywhere in the world: 24/7/365
- It's accessible by everyone in the world who has a computer and internet connection

Because of these reasons we can say that XBT is stable and predictable. We already see how on many exchanges, XBT is being used as a base "currency" that all other cryptocurrencies are denominated in.

And because it's stable and predictable, it acts as an *international settlement system*, and therefore can also act as a global reserve currency. Currently, the incumbent settlement system (National central banks acting as clearing systems between commercial banks) is the only way the global economy can function. For some perspective, consider that financial activity consumes about 1/3 of the world's economic productivity (~USD30 trillion).

What about technologies that are Turing complete, more technically advanced, etc.?
- When we consider Bitcoin's primary function to be a global reserve currency and settlement system, these features are at best irrelevant.

But the transaction fees are killing me!
- Many cryptocurrency users recognize the financial and human costs of ledger transparency and mutability in the existing financial system, but didn't realize that the cost of immutability in a cryptocurrency could be the same or higher. Consider that correspondent banking is complex and costly, but those costs are absorbed by everyone who participates in the financial system (mostly taxpayers). At the moment Bitcoin users subsidize the current financial system through their taxes while also incurring the costs of their Bitcoin transactions, so the pain is naturally doubled. Users in different countries will also experience different transaction cost pain points, and some people will leave in search of something else to buy their coffee with. Sorry, there's no such thing as a free lunch, and billionaires that have been paying thousands to keep their transactions private in the existing banking system have no problem outbidding you on your next transfer, and in fact will likely have more trust in Bitcoin as the cost of using it increases. User behavior will update accordingly, and people will really "become their own bank".

Ethereum/Ripple/Dogecoin is overtaking Bitcoin's marketshare!
- XRP, ETH, etc. are tantalizing to banks, governments, and speculators. But they will only ever "experiment" with these things in order to generate PR and appear clever to their stakeholders. They know that these systems are not stable enough for production, and that's why there are no examples of anyone going "live" with the thing they built on their forked Ethereum blockchain. Cryptocurrency "Marketshare" is a buzzword concept created by speculators and marketers, who have no idea what the things they are buying right now are worth.

I do not understand how stable Bitcoin you are while its value goes up and down in a short time

[pooya87]

~
But the transaction fees are killing me!
~

i agree with the general idea but we should not forget that transaction fees shouldn't have gone this high at this point. because of how bitcoin works.
the fees were supposed to be there to compensate for the "computing power" miners spend after the reward went down low enough. but for now they are only used as a competition factor to get in the blocks while miners are getting paid more and more.
it is not just about fees being high, it is about fees being unfairly high while we could have had a scaling solution and have normal fees.

[DoublerHunter]

I think the only thing that makes bitcoin very valuable currency is the security and how easy to use it as a currency and also the growing or rising price of it that makes every people who buy bitcoin really happy but in terms of fees it is not that valuable because there is still a lot of currencies out there that is cheaper in fees than bitcoin.

[687_2]

People suggesting be your own bank with bitcoin forget that a bank is more than just a place to deposit money, its a place to get loans and access other forms of financial activity that bitcoin cannot or at least does not currently do.

True, and right now Ethereum and Ripple are performing a mating dance with commercial banks in order to capture that (very inefficient) side of the equation. What I'm saying is that I think private persons and smaller companies can trust Bitcoin with their life savings, and then they can use other technologies that are lower trust for other use cases. They might have a "current account" where they use Monero for daily purchases, for example.

Ethereum/Ripple/Dogecoin/etc. are not places where I would imagine many sane people will park their most precious reserve capital.

[687_2]

I do not understand how stable Bitcoin you are while its value goes up and down in a short time

You're thinking of the *price*, not the *value*. Consider the technology of the wheel: while the price of wheels may vary drastically, depending on manufacturing location, roundness, shipping costs, tariffs, etc. the value of the wheel to humans doesn't really change.

Price is a highly imperfect mechanism that's used to *estimate* the value of a thing.

[Taki]

But the transaction fees are killing me!

Not only you! I do really think that such fees can make negative effect on bitcoin. The biggest mass of people who use bitcoin are micro earners to whom such fees semms just crazy. I am sure that wallets have to change something about that or they will loose users.

[FA wings]

Now bitcoin ，It has become a rare collection

[AicecreaME]

I think because bitcoin is like the gold which is its price is keep going up after a few months or years and there is nothing to prove about bitcoin because it already prove itself to other people that it is a good currency to use in terms of being anonymous and so on. Bitcoin is valuable for me also because it is not that hard understand it and even an average person that understand bitcoin very fast.