I honestly think it's good that it isn't encumbered by any of these restraints. Money really is just a ledger to keep track of value that one participant owes another. So it's just a ledger, but to be the best ledger, it requires properties that are difficult to enforce. Most forms of money have some properties, but you usually have to trade up certain ones in order to get others when switching between different forms of what is accepted as money. Here is a handy chart that summarizes all of the properties well. For something to replace Bitcoin, it would have to combine every single property that it has and yet somehow even improve on it. The trouble of course is that in order to make one property better, you are usually sacrificing another property. Bitcoin mostly gets it all right. It's kind of like just trading futures. If you want a high win rate, it means that people are having to use a huge stop that is far away. If you use a tight stop, then your win rate will be small because your stop is always hit. If you want a one-to-one risk to reward ratio, then you can have a high wind rate, but if you want a one to five risk to reward, then chances are you're not going to be hitting a 90% win rate. But bitcoin somehow is the perfect combination of 99% win rate, needing only a one tick stop, and a 50 point profit on a winning trade. How are you going to improve on that??
Reality is something that is very difficult to pin down in this crazy world today. Bitcoin transcends even reality. Reality is usually subject to interpretation but Bitcoin is just math. It doesn't require interpretation. It's objective and absolute. If you don't like it, feel free to use something else. But when everyone else chooses to use it, then you will be forced into it if you want to participate in the future world.
Nothing will “topple” bitcoin. It’ll just run out of convincing bull catalysts/narratives to draw incremental new money, the one-time post-ETF-launch reallocation flows will peter out, and returns thereafter will be nothing special. Certainly below equities.
Though it sounds credible I'm not convinced. Sorry. Like I stated above, all other assets like stocks, futures and currencies have their volatility stemming from macroeconomic and corporate numbers. Good news drives up the price of those assets and vice versa for the bad numbers. Bitcoin seems to be all on its own. There's no real catalysts other than personal opinions that it should go up to $1M (which is like giving out only earnings guidance without announcing any actual earning). I would like to see a link between Bitcoin and hard data like economic numbers to back up those claims. You know, something tangible. But I have no idea what that is.
I think you would start by looking at the alternative within its sector. Fiat. What supports fiat? What drives up Fiat. What causes Fiat to crash? what are the macroeconomics of fiat? Within a given country...what are the Financial numbers regarding their fiat? Is bitcoin just an alternative to USD. No. Bitcoin can be bought and sold all around the world. So its an alternative to each country's fiat and might be better or worse depending upon the monetary situation, the M1, the sovereign debt and the printing of the said fiat.
Thanks for the pointer. Now tell me why Bitcoin is so much more volatile than its Fiat counterparts, even though it has no direct bearing on any of those Fiats you mentioned.
Exactly. It is not tethered to anything real. And so, you have no way of determining if it is overvalued or undervalued at any given time. Any such notion is utterly arbitrary. My gut feel is that one day there will be a collective awakening and the realization that everyone sleepwalked into the middle of the highway. And it’s gonna leave a mark. But until then, there are no boundaries and pigs can fly.
Or they might actually get creative and come up with a real tangible solution. I'm optimistic that Bitcoin itself is here to stay. The technology is solid IMO. It's the bubble mania that is the problem, which has nothing to do with Bitcoin's origional use case. But I better shut my mouth before everyone here jumps on me.