Comment by overgard | Hacker News Reader

Comment by overgard | Hacker News Reader

Apologies if this is a dumb question because I don't understand these techs very well.

It strikes me that a fundamental problem of bitcoin is that it's a deflationary currency, so there's no sense in spending coins if you can just hold them (other than to exit the volatility of the market), because the coin will likely be way more valuable if you just keep it. Whereas with traditional currency, you have an incentive to spend it, because a dollar today is worth more than it would be a year from now. Am I missing something there?

So it seems like as an actual replacement currency it can't work because buying things with it is a bad idea. Is solana different in this regard? It seems with other coins the value is in sending and receiving money based on real currency? Except that transaction happens somewhat publicly if you're not funneling different amounts through different wallets? I'm not trying to be glib, but I feel stumped on what I'd use cryptocurrency for other than a long hold investment or to buy something illegal. I know that's a common complaint, what I'm hoping for is someone to tell me where I am mistaken?

Bitcoin is like gold, so in many ways I agree with you. I don’t think spending BTC is wise, for the exact reasons you’ve pointed out. I say this as someone who has been into crypto since 2013. I have Bitcoin, and I will likely never sell it.

This has nothing to do with Solana or other similar technologies like Ethereum though. It’s like comparing gold to the internet. It just doesn’t make sense. It’s not even apples and oranges, it’s like apples and farari’s.

Staking SOL or ETH can yield money because you’re validating transactions, similar to mining, but without the high energy costs. These technologies are platforms.

So why buy SOL? Well, so you can stake, but also because it’s volatile like many crypto assets. You can make money trading it.

However, this is a different side to the market than the tech. The people actually building software on top of Solana that ideally helps drive the price of the token in the market. It’s not intended to be money. Most crypto currency’s aren’t.

> I have Bitcoin, and I will likely never sell it

Curious, why did you buy it if you will never sell it?

2 reasons:

1.) as collateral. I’ve already taken out and paid off a loan using my BTC as collateral.

2.) to pass on to my children. I see Bitcoin as a generational asset. If we continue on the path we’ve been on the last 10 years, a single Bitcoin could be worth millions in 30 years.

OK, intergenerational transfers are a thing, especially of assets whose value is somewhat independent of the state.

So does this mean other currencies are built on this? I'm admittedly a noob I just don't get what makes this exciting. Like, ok, blockchain running faster which enables me to do ___?

But cryptocurrencies have zero intrinsic value: If only one person owned all the $COIN and refused to part with any of it, the world wouldn’t accept its use, and would just create another currency with similar properties.

What you’ve neglected to mention is altcoins of every stripe can’t accomplish anything whatsoever — be it running “smart contracts”, acting as a medium of exchange, or securing the value of assets built on top of them — if no one is willing to speculatively hold them as a store of value first.

Touting themselves as the “oil” or the “internet” to Bitcoin’s gold is a rhetorical strategy employed by altcoin promoters to bootstrap speculative value storage on the networks they’re invested in. Without speculative value storage, they have nothing, the blockchain halts, and no one can use it for anything.

It’s all a total confidence game to its very core, without exception, and it irks me to no end when people egregiously misrepresent this reality, particularly for financially motivated reasons.

Case in point: “It’s not intended to be money. Most crypto currency’s aren’t.”

You will need to define 'deflationary'. Are you assuming the price of bitcoin (in real goods) will always go up? Why? That would imply an enormous market failure.

The supply of bitcoin will increase until the year 2140 due to block rewards. Afterwards, the supply will be constant (equal to 21M btc).

A sibling comment compares btc to gold. Well, there are a lot more volatile assets than gold (fiat currencies included). The ratio of the price of gold to world GDP has been pretty constant over time, despite the value of gold at times also being derived from various fad uses.

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