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> Not true, It is another ATH day for BTC, so literally anyone that bought BTC in the past and held is in the money. "Many often lose everything" is absurd.

If we all only buy and never sell or spend or use it, the price can only go up!

> I'd rather not hold tether in general, but IMHO it is less at risk than funds in bank accounts.

That's not even remotely true. Funds in bank accounts are FDIC insured. Tether depends on the liquidity of exchanges to buy your Tethers, which would collapse across the board if problems with Tether were announced.

> I know this might sound strange to you dear reader, but you may not have experienced a time where bank accounts got haircuts

The linked article literally talks about the haircut that Bitfinex users had to take when they lost money.

> Be your own bank!

The reality is that people do not want to be their own bank, nor do they want to pay tens of dollars in transaction fees every time they want to make a deposit or withdrawal. They especially don't want to lose all of their money if they forget their password. That's why most retail investors just leave it in an exchange, which acts as their bank.

Sure, they could technically withdraw to a Bitcoin mind wallet and walk around with the password in their head, but that's not a great solution for 99% of people out there.

Banks are fine.

I prefer to think of it as "depreciating fiat currency worth less every year", but sure. FDIC insurance is 250k per account, in the US. Only 323M/7.6B can take advantage of this. Don't forget the USDT liquidity in the defi markets, which is a growing area too: https://defimarketcap.io/protocol/uniswap-v2

I think my point is that at this point even the solvency of tether corp is actually irrelevant to the value of their USDT. People believing in it seem to work well enough. Until people no longer believe in it, it will seem to exist.

Bitfinex haircut is yet another reason why you don't store money in exchanges. Please stop assuming that people don't want to custody their own funds -- I have spent a great deal of time in the recent months and years convincing folks to install wallets and take custody their funds. Most find it easy and painless. There is a light bulb moment when people realize they are in control of their funds, and nobody can take this away from them. Exchanges are like internet banking, boring in 2021. Money over the internet, however, is really cool.

Always stress the importance of backing up the seed phrase, and folk's wont lose access to funds. People like it! Its like a magical incantation to recovery coin anywhere in the universe.

Negative interest rates are coming for your dollars. The bank is not your friend.

> I prefer to think of it as "depreciating fiat currency worth less every year", but sure.

How is a dollar worth of Tether less impacted by dollar inflation than a dollar in a bank account?

That was more at point for fixed emission currencies like BTC vs fiat USD but running with your interpretation:

* bank could start charging negative interest rates

* tether could start providing interest yield to holders

* banks could start freezing funds

* tether could start freezing funds

lots of things are possible. Will they happen? Unknown.

>It is another ATH day for BTC, so literally anyone that bought BTC in the past and held is in the money.

To actually make money you must sell - to someone, higher than you bought. Then that person is in the same situation. Bitcoin is a zero-sum game (negative if mining is taken into account - billions of losses per year) so for every realized profit there's an equal loss somewhere else.

While technically just one (formerly extremely rich) person could be the source of profits for everyone else by buying enough btc at ath from every holder, leaving everyone else in profit, the more likely distribution is Pareto with 20% winning and 80% losing.

Ahh, I feel that you don't believe bitcoin is money. You don't need to 'sell' it for fiat. What matters is the purchasing parity power. It is money already.

I do not agree that it is a zero-sum game. This assumes that it provides no utility outside speculation, and everyone just wants back into USD. As the markets grow, there is less desire to hold depreciating assets like dollars, especially with negative interest rates.

> You don't need to 'sell' it for fiat. What matters is the purchasing parity power. It is money already.

If it would be money I could go into just about every shop and purchase whatever I want for crypto. Which, obviously, I cannot.

I don't only believe that crypto currencies are not money, but a huge pyramid scheme, which will result in many, many losers. Some of them having lost their life savings.

I'm pretty sure that we vehemently disagree on that. But claiming that crypto is money really stretches the definition of money.

You literally can with payment cards do this today. The largest cryptocurrency exchange released a visa card where you can 'spend crypto'.

I hate it when starbucks doesn't take my Krugerrands. What if cryptocurrencies can buy things that fiat currencies can not? Not everything is sold in a physical store.

What if /the payment card industry/ converted cryptocurrency to local fiat for you? Right now there are several psuedobank providers that will do this (for years now), but we are talking about the card network themselves doing it themselves. Cryptocurrency does certainly stretch the definition of money. That's why it is exciting.

Pyramid schemes are something different, pyramid schemes are about recruiting folks to pay you, and them getting them to repeat the same trick, with money funneling to the top. What you are thinking of is a Ponzi scheme, in which early investors are paid by later investors.

Now this is where the definitions get blurred. Most asset classes act this way, and we don't consider SPY a ponzi, nor housing in major cities, nor the USD market itself.

I am not trying to recruit, or even encourage you to convert your hard earned funds on magic internet money. But this dismissal of cryptocurrency is injurious to your future wealth.

Payment cards that allow you to 'spend crypto' don't make cryptocurrencies money any more than a card that allowed you to spend gold or shares or cabbages (if you happened to own a warehouse full of those) would make those things money. BTC isn't 'real money' in the conventional sense as long as people aren't transacting in it directly, and I can't see a path towards people ever doing that - who wants the buying power of their savings and income to swing wildly from day to day? As far as I know that only happens in countries with serious economic problems.

> with payment cards do this today

These cards don’t pay with cryptocurrencies. They pay out dollars and do finance on the back end to abstract away the credit and conversions. (They’re a great idea.)

There are bitcoin credit card that exist.

By your definition, USD isn't money either, because none of the shop here accept it. I first need to change it to euro to be able to pay in a shop, just like bitcoin.

Bitcoin is not a pyramid scheme, because there is no promise of gain. Everyone is saying it is a risky asset and in that sense it's just like any other speculation.

Where in the world do you not need to exchange BTC in order to buy things with it? Can you point to any shop where things are priced only in BTC? Your bitcoin credit card is just an on-the-fly exchange, that doesn't mean bitcoin is money.

There was the silk road. I guess there are new market place pricing in bitcoin. Also some ransomware were you can buy your files back. Maybe there's just some libertarian community somewhere with a few people using bitcoin.

If I go to any shop they not will not accept dollars. I still think it's money.

>Ahh, I feel that you don't believe bitcoin is money

It's a fact it isn't. Money isn't a matter of belief, money must be backed with something. What is bitcoin backed by? Nothing. It goes up when speculative frenzy heats up and collapses violently when speculators lose interest. If every corporation in the world bought it to 'store value' it would moon. Then a depression comes, corporations start selling to cover operating costs. Except it turns out everyone wants to sell and nobody wants to buy, resulting in a violent collapse.

Dollar is money because it's backed by all dollar denominated debts, including taxes. Any American is forced to sell a double-digit fraction of income for dollars. That's backing. It's true the value slowly falls, but no other asset with such a widespread demand source exists - it can be thought of as a utility fee.

The prevailing (false) meme in bitcoin circles is that it's going to be less volatile once it grows bigger - on the level of us dollar. Yet much smaller currencies are money and are significantly less volatile - because they are backed by their respective states enforcing debts.

>This assumes that it provides no utility outside speculation

Whether there's actual utility or not, it's captured by tx fees. Tx fees go to miners, btc holders don't gain anything.

Don't get too caught on in memes, btc only ever existed during a global bull market. People and companies are flush with cash they have no idea what to do and part of it goes to play on bitcoin. If you manage to dump on them then congrats - you took their money. The moment the global bull run ends and people are forced to try to get their 'stored' value back it's over. There was a temporary example during the covid crash.

> You don't need to 'sell' it for fiat. What matters is the purchasing parity power. It is money already.

Uhh I do if I want to pay rent, because as much as you want it to be so, it is in fact, not a real currency.

Collectively crypto-currencies burn enormous amounts of energy for what? For a sub-par digital currency run by a collection of people with some ideological opposition to mainstream economics?

>>Not true,

It is literally true. People who bought at $50K around this week, have to hope there are people who will buy at $60K, then those people have to hope there are people who will buy at $70K, then $80K, then $90K....

From that perspective this looks like a kind of a Ponzi scheme already.

Of course like most Ponzi Schemes the early investors reap massive gains. It's the ones who come later who suffer.

By your logic any investment is a ponzi scheme. You buy a stock with the hope that you'll sell it at a higher price later on, etc.

>>You buy a stock with the hope

I don't buy anything on hope. I do lots of analysis fundamental and more.

I invest only if the company is and will, with, enough metrics to support it will perform in the future. The stock price is backed by the health and growth of the business.

The easiest way to to do this is an index fund. Which by some definitions tracks large segments of the economy itself.

You buy based on maximum expected value for your risk tolerance and then hope you don't end up on the low end of the distribution of outcomes.

Example tail outcomes:

- Anti-capitalist uprising destroys all records of ownership.

- Massive fraud in companies you invest in.

- Competitors outside your holdings outcompete and take the market share.

It's pretty reasonable to bet that these won't happen at a sufficient scale to affect you, especially with international diversification, but you do also hope they won't.

Also, the stock price is backed by people's perception of the health and growth of a business, and by the price and performance of alternative assets. Pricing is hard. Obviously fundamental earning power influences price, but it's not the only or biggest force in price discovery, especially on <10y scales. As we have seen in the past year, expectations of money supply have a drastic nonlinear effect on stock prices across the market. A major (and unlikely) Fed strategy change could halve the market and keep it below ATH for a decade.

Not at all. Investing in a stock is the same thing as investing in a business, since you literally own part of a business. And businesses produce income, aka profits. Bitcoin doesn't produce income. Your profits from "investing" in bitcoin can only come in the form of capital gains.

From 3rd Jan 2009 until today, "Many often lose everything" is not true. All holdings are in the money. We don't know of the future.

BTC is no more a ponzi than any asset class. Take a look at https://assetdash.com/ BTC is currently the 6th most valuable asset class by market cap (ignoring that market cap for coin isn't quite the same thing). Literally every asset on that list fits this definition, eg: 'Hope for a greater fool'.

The thing is, in all asset classes, it tends to be the way that early investors reap massive gains. Housing. Stocks. Cryptocurrency. The great thing for you is it is still very early days for Cryptocurrency. It was only invented in 2009!

What should be concerning is the sustainability of a 'scheme'. When unlimited USD can be printed at the desires of the administration, how can a fixed emission asset NOT outperform something inflationary?

>>From 3rd Jan 2009 until today, "Many often lose everything" is not true. All holdings are in the money.

This is correct if you bought on 3rd Jan 2009. It depends on when you bought it. Whenever you bought it, you need some ready to buy it from you at a higher price. So as long that is true, you make profit. In fact that is profit and loss by definition.

>>We don't know of the future.

Exactly, ensure some one will buy from you at a higher price. So as long as you do this, you should be fine.

>>The thing is, in all asset classes, it tends to be the way that early investors reap massive gains. Housing. Stocks. Cryptocurrency.

Not true. Take housing for example, Housing tracks people ready to stay at a place for employment and other opportunities. Its value is tied to the businesses around. Stocks themselves are tied to how the company does well.

What does Bitcoin track? Electricity spent to mine it? Speculative people hoping the next idiot comes along to bail them out? Well electricity isn't exactly scarce. Supply of electricity is unlimited for all practical purposes.

>>The great thing for you is it is still very early days for Cryptocurrency. It was only invented in 2009!

We don't know. Only the next people ready to invest $60K for a coin can decide that. And then the ones ready to put in $70K. Eventually some body needs to be present who can put in something like a $500K or a million.

>>What should be concerning is the sustainability of a 'scheme'.

Indeed.

>>When unlimited USD can be printed at the desires of the administration, how can a fixed emission asset NOT outperform something inflationary?

Because unlike USD backed by US government and its military. Bitcoin owners are in no position to invade some country like Iraq to liquidate themselves.

The most beautiful thing about bitcoin is it needs no government or military, it just is. Math > Militaries.

Value of money is tied to its supply. What happened in 2020? https://fred.stlouisfed.org/series/M2

No the most beautiful thing about Bitcoin so far is having people who are ready to buy it at $XK/coin helping those who bought it at $X-1K/coin.

The ugly thing about Bitcoin will be when coin holders realise there are no people ready to put in $X+1K/coin, so people who bought at $XK will be ready to sell at $X-1K, and those who bought at $X-1K will eventually sell at $X-2K.. then $X-3K, then $X-4k...

It's ok for people who bought at less than what is selling now. Not that much for those bought above it. In all this those who bought at $XK, will be happy to minimise their losses at $Xk - $1K and so on...

I'm sorry dude, you really don't understand how this works. It isn't about finding a greater fool willing to pay $1k more than you did. The reality is there are plenty of people that will keep buying. There is no 'run out of buyers'. Years ago we spoke of 'buyers of last resort'. This used to be suckers like me. Its now large institutions playing games with each other. This world is far larger than you are imagining.

I will buy BTC as long as I am able, with fiat currency, regularly. I do this as a hedge against inflating fiat currencies, and as you can buy a part of a coin, the actual price per unit doesn't matter as much. What matters is the store of value over longer times, in an deflating asset class.

Can I recommend you watch some of Andreas videos at https://aantonop.com/videos/ to inform yourself?

> the actual price per unit doesn't matter as much. What matters is the store of value over longer times

Contradicting statement. Or how do you define "store of value" if not in USD?

I wanted to follow up and say: a) you can buy part of a coin, it scales to 8 decimal places! You don't need to buy a whole coin. b) it is money already, there is no need to 'sell' c) profit and and loss by definition gets a little weird with currencies. Purchasing parity power comes into play. When trading shells for widgets, you might end up with more or less widgets, but they can be more or less valuable per unit. If you are still thinking folks are playing the "buying btc with usd to sell for more usd later" you haven't quite grasped what is actually going on. :-)

>>If you are still thinking folks are playing the "buying btc with usd to sell for more usd later" you haven't quite grasped what is actually going on. :-)

Then please explain us in clear words what is going on.

They think BTC will replace fiat altogether such that anyone left holding dollars/"shitcoins" will be royally f-ed, and have to beg the coiner fiefs for the chance to rent a humble plot on their lands in perpetuity. /s, but not nearly as much as it ought to be.

> Housing tracks people ready to stay at a place for employment and other opportunities. Its value is tied to the businesses around.

To a certain extent, but ask the people in Vancouver what's going on with housing prices (tip: it's being used as a store of wealth and for speculation by Chinese people and others) Many, many houses sit empty so it has nothing to do with people wanting to live there.

>Well electricity isn't exactly scarce. Supply of electricity is unlimited for all practical purposes.

Tell that to the people of Texas!

Some of these assets have a component which tracks to real world utility, but often other factors dwarf the so-called fundamentals.

Long term investors in stocks hope those companies generate value for others, producing profit, and that fundamental reasoning is why the stock should either go up or dividends be paid. Proxy capitalism. Money goes from everyone to the owners (wealth gap rises).

That's not to say stocks aren't also priced by market dynamics of speculation and meme spread. However, very long term trends in stocks should beat inflation in the currency those stocks are most exposed to. Stocks are a liquid representation of the most productive asset you can own (the work of other people and technology), so a good deal of the money created ends up in the stock market. Plus, companies own various tangible assets. That reasoning creates a strong price dependence on money supply.

Bitcoin's relatively fixed monetary base makes it theoretically stable under fluctuations in fiat monetary base. However, at the moment, partially due to low relative market cap of crypto compared to the entire stock market, meme spread and sketchy actors create huge amounts of price movement, leading to distrust. Long term that could definitely change but it also might not. Currencies have a network effect. Until critical mass is reached (historically by government sponsorship), the value of a floating currency will be unstable.

Also, you mention Bitcoin is fixed-emission. This is true and worth noting - around 18.6M out of 21M coins are minted. Right now inflation is ~2.2%. Relative to fiat this is pretty low, and there's only ~13% inflation left. https://charts.bitcoin.com/btc/chart/inflation

> BTC is currently the 6th most valuable asset class by market cap

TIL commodities, real estate, intellectual property, factories, bonds and private equity aren’t asset classes.

If you want a more nuanced understanding of the "Bitcoin is a ponzi scheme" claim then I'd highly recommend:

https://www.youtube.com/watch?v=zT2e6dnY-Co

> Do I trust an ECDSA signature more than I trust a nameless brick and mortar bank holding some corporate funds. Hell yes. Computational security. Hard laws of math. I'd rather not hold tether in general, but IMHO it is less at risk than funds in bank accounts. I know this might sound strange to you dear reader, but you may not have experienced a time where bank accounts got haircuts, or your bank started freezing your funds. You cannot trust a bank! Be your own bank!

People have a very short memory. Citizens of Europe/US are generally not concerned because they think their governments will back their promises. Citizens of less fortunate countries do not mind the risk of Tether/Bitcoin because they national central bank is riskier and more corrupt/scammy.

“With enough investment, you too can be a part of the crypto hype train, ready to on-board more people into buying into crypto!”