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0 pointsbena5y ago0 comments

I see this being thrown about as a talking point a lot, but I think it ignores what's fundamentally happening here.

Bitcoin is essentially a proxy for another currency. Mostly the USD. These people need a way to protect their assets from what their own governments are doing to the value of their native currencies.

They cannot buy securities or foreign currencies for various reasons.

Bitcoin gives them a way. A way to convert their native currencies into USD, a stronger currency.

So while it's a good use-case for Bitcoin, it's not exactly a situation that's applicable to the world at large.

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andreygrehov5y ago

> Bitcoin is essentially a proxy for another currency.

Yes, but this is only temporarily. It's like refactoring systems. You create a new system and a proxy and then have the old system communicate with the new one via the proxy (or vice versa). Eventually, the old system becomes obsolete, so you kill it and get rid of the proxy.

PragmaticPulp5y ago

But if your proxy takes at least $10 of your currency every time you use it, you would expect people to look for a different proxy.

In your example, Bitcoin would obviously be the "old system" if everyone wanted to use it for moving money around, because there are plenty of more advanced alternatives that work far better.

So why is Bitcoin so popular? Because it's a speculative investment. A new asset class divorced from fundamentals, making it impossible to say when the value is too high. That's why people like it.

kortilla5y ago

But there is no evidence Bitcoin will ever make that transition. Gold has been around forever and we still don’t transact with it.

andreygrehov5y ago

Yes, but I foresee Bitcoin being used similar to how gold used to be used before.

j / k navigate · click thread line to collapse

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andreygrehov5y ago

> Bitcoin is essentially a proxy for another currency.

PragmaticPulp5y ago

But if your proxy takes at least $10 of your currency every time you use it, you would expect people to look for a different proxy.

In your example, Bitcoin would obviously be the "old system" if everyone wanted to use it for moving money around, because there are plenty of more advanced alternatives that work far better.

So why is Bitcoin so popular? Because it's a speculative investment. A new asset class divorced from fundamentals, making it impossible to say when the value is too high. That's why people like it.

kortilla5y ago

But there is no evidence Bitcoin will ever make that transition. Gold has been around forever and we still don’t transact with it.

andreygrehov5y ago

Yes, but I foresee Bitcoin being used similar to how gold used to be used before.

j / k navigate · click thread line to collapse