yes, i would accept bitcoin. i don't think it's comparable to tulip mania in that btc can be transferred easily worldwide for goods and services. i recommend listening to a few daily briefings with Raoul Pal on the long drive if you want to understand main-stream adoption of crypto.
Great question! I hope this came in a good-faith manner, I think it did. Bitcoin invented a way to transfer value online without a third-party intermediary, completely peer to peer. It also invented a protocol in which all transactions (and all holding of participants) is known by all, can't be changed, can't be f*cked with and is completely fair. There is no way to cheat the bitcoin network since all miners and node operators have a copy of the entire bitcoin blockchain. For example, if I suddenly said I had 100 bitcoin everybody would know I was full of shit since that is not on anybody's copy of the bitcoin blockchain. An analogy is the bible. I could buy a bible, change it, then say "look Jesus didn't die on the cross he was actually stabbed to death" problem is nobody would believe me since everybody has their own copy of the bible and it doesn't say that. Bitcoin is the same way. Another of bitcoins inventions is the ability to prove you own something in the digital realm. Before bitcoin, digital items (think documents, music files, PDFs, etc) could just be copied and sent around. There was no value there, since everything can be copied. Bitcoin solved this. You cant just copy a bitcoin and now say you have 2 bitcoin. The implications of this are huge. Another big point, coming from a former bond trader (me), is that bitcoin is a true bearer asset. Paying somebody in bitcoin is similar to giving them cash in the sense that there is an immediate final settlement. Contrast this to the modern financial system ... nothing is settled immediately. Every bond trade I have ever done either settles the next day, in 2 days, in 3 days or longer. Same with international payments, credit card transactions, etc. Bitcoin can thus be used as a global settlement layer with much more efficiency than the current, fragmented financial system. Yet another use case is the absolute scarcity of the asset. There will only be 21 million bitcoin (and no, the fact that there can be other cryptos doesn't change this fact.). Couple the scarcity with its ability for cheap storage, its divisibility (1BTC = 100,000,000 satoshis), its security (you can't cheat the network), its nonsovereign/global nature (no 1 country controls it) and its relative non correlation with traditional assets (outside panics, which makes almost everything correlated) and you are left with a much better version of what people have used gold for for 5000 years (in my opinion of course). Oh yea and by the way the bitcoin network literally cant be turned off. Its more like a living organism than a corporation. Even if the US banned it lets say, as long as somebody, somewhere is running a bitcoin miner of a bitcoin node, the network will work as advertised. This is pretty crazy stuff. That leads to valuation and "why" its priced like it is. Obviously, people are going to have differing opinions on this, just like the value of pretty much anything. As a simple mental model, its my opinion that bitcoin is a much better, 21st century version of gold. In that context, gold's market cap is 11T and bitcoins is 1T. That argues for a 10x increase from here to match golds market cap. I think its much better than gold, so I can make the argument that it shouldn't match golds market cap but surpass it. Oh yea, it can also be used as currency. In this use case I am not as bullish. We will see, but the volatility certainly has to come down if we are ever going to use it as a day-to-day currency. I do think people are making a huge mistake by not investing just because its not used as a currency. As I hope I outlined above, there is a ton more upside even if it never becomes a widely used currency. There ya go. Please poke holes in my arguements!
The concern I have with BTC is that it's still a very new asset class. Stocks have a long track record of preserving wealth. Even though there are ups and downs, there are hundreds of years of market data to kind of know what to expect in terms of bull markets, bear markets, drawdowns etc. If you hold for long enough (20 years) you should do ok. It's bad enough that BTC already has a history of 80% drawdowns but it hasn't been around long enough to be confident that -80% is the worst that can happen. Up to now it has always recouped losses within a year or two but I wouldn't be confident that it will keep doing this. At the back of my mind is the thought; what if the next drawdown is 95%.
I think those are all fair points. I would just say if the network participation keeps growing exponentially like it has been hard to see the asset go to 0. That being said, some amateur bitocin people have argued that the vol / large drawdowns are a thing of the past bc higher market cap, more institutions, etc. Yea right. I don't buy that at all. I expect bitcoin to continue to compound at a very high rate, but also continue to have enormous drawdowns. My 2 cents.
It is. I'm trying hard to figure this out. Ever since I was told the fairy tale of the Emperors new cloths I'm a little suspicious of something I cant see. Is that bitcoin or block chain? Why can't the blockchain technology be used to transfer $US from peer to peer? It seems that bitcoin is priced in $US. From what I'm led to believe if I make a transaction in bitcoin today the merchant will use the conversion rate at the time to convert the price is $US to bitcoin. I don't see anything priced in bitcoin, probably because of the fluctuations. How is that different from you telling me you have a 1000 dollars. Someone somewhere has a record. I suppose you could have 1000 counterfeit dollars but I'm sure there will be scam artists with someway of duping us guys who would take counterfeit cash.
trillion bitcoins? that is a lot. if it is the peso (any peso), then that is not much. if it is the dollar, there are more than 20 currencies in this world using dollar. some said USD baby?! during our school days, we have been taught to be clear in our communication, and the teacher made sure we included the UNIT of measure.