Quote from: deisik on March 14, 2017, 06:10:50 AM

Quote from: jaysabi on March 14, 2017, 03:17:24 AM

Quote from: deisik on March 13, 2017, 05:46:03 AM

Quote from: jaysabi on March 12, 2017, 11:38:22 PM

Quote from: HabBear on February 13, 2017, 10:25:09 PM

https://www.theatlantic.com/business/archive/2013/04/bitcoin-is-no-longer-a-currency/274859/

An article from The Atlantic magazine - from 2013, way back in 2013 - declaring that bitcoin is not a currency, but "the ultimate tech stock"!

The four years since the article was written has proven that bitcoin is akin to an Amazon or Facebook (stock, not company), and much less "Pets.com". That's a good thing.

I have to agree with them. Every week that passes without a new company in any local metropolitan area deciding to accept bitcoin as currency is a two weeks further away from bitcoin actually being adopted, mainstream, as a currency.

Bitcoin is an investment. A stock or an asset class/commodity can be debated, although it doesn't much matter. Bitcoin is a store of value not a medium of exchange.

What do you think?

Agree with this completely. Bitcoin doesn't satisfy the definition of a currency, and the part that is most lacking is a stable store of value. It's too volatile, which makes it fantastic for gamblers and speculators to trade in and out of it, but terrible for conducting commerce or using to store wealth, which are necessary for a currency to provide. I can get on board with calling it an investment, but it's clearly a speculative and high risk investment. Based on its characteristics, it cannot be more than that

These are not Bitcoin inherent characteristics or features, by any means

Bitcoin is volatile precisely because it is not used in commerce, though this is sort of a vicious circle here. That is, Bitcoin is not used as a real currency because it is too volatile but it is too volatile because it is not used as a currency. Nonetheless, I still have to add that I don't agree that the most important feature of a currency (which Bitcoin allegedly lacks) is being a stable store of value. But let's assume that you are right (i.e. being a stable store of value is an important if not outright most important characteristic of a currency). In this very case, Bitcoin has everything in it to become such a store of value since its issuance is rigidly fixed, predetermined as well as known in advance to virtually everyone who cares, and there cannot possibly be more than 21M coins in the end. As you can easily conclude, volatility is not inherent to Bitcoin and thus it is necessarily caused by external factors which can change over time

Chicken and the egg argument notwithstanding, instability is an inherent characteristic of bitcoin. Bitcoin has never been stable enough for dependable commerce because it's not backed by anything but a collective sense of what it's worth. If there were no alternative currencies in the world, perhaps it would have a stable value out of necessity. It's because there actually are stable currencies that bitcoin can fluctuate, because wealth created by fluctuating value is preserved by selling out of the position. The fixed supply hasn't done anything to create a stable value, so you have to conclude that the volatility is because no one is interested in it as a currency, but a speculative vehicle from which they can profit from. Of the major functions of money, (medium of exchange, unit of account, store of value) store of value is the only one bitcoin doesn't meet well, and there's no reason to expect that it ever will. Bitcoin will always be short term in nature, because holding long term opens the holder up to the risk of wild fluctuations in the value stored within, which is the last thing anyone should want in a currency

I don't particularly disagree with your attitude

But you still seem to lack a proper understanding and deep insight into the matter of things, in this case into currencies and money. Personally, I would refrain from distinguishing between them here to avoid useless confusion. In other words, you describe effects without trying to delve into the causes of these effects. First of all, any currency (whether is backed up by anything or not) remains a matter of "a collective sense of what it's worth". More specifically, currency worthiness (as a currency) is defined exclusively by whether it is used as a currency or not ("money is what money does"). Gold is dear, but it basically has no monetary utility (read it is not money) because it doesn't and cannot circulate nowadays as a currency

Further, I don't agree that "a store of value is the only [function] bitcoin doesn't meet well". Not that I deny that it is factually wrong. It would be going against reality to argue to the contrary (at least, so far). What I mean to say is that Bitcoin's store of value advantage before fiat currencies gets heavily overridden and massively "run over" by external factors. Nevertheless, this built-in feature, its essence of sorts, is still showing through when we see attempts at instigating panic sell-off now and then, which still miserably fail. In other words, the kind of volatility we see today is not the volatility of some trash asset or money. It seems to be directed primarily upwards, and it is debatable whether we can call it volatility at all

While you were telling me all about my lack of understanding and deep insight into the nature of money, you were displaying your own misconceptions about quite a basic concept. Perhaps you'd be better suited not to lecture from a place of perceived superiority when you don't understand basic concepts like volatility yourself. Volatility is a very specific and easily demonstrable concept. Volatility is a measure of price change over time. The only way not to have volatility is to have stable prices over time. Constantly moving in one direction is not an unvolatile instrument. When you plot bitcoins historical volatility against the dollar, its striking and there's no debate to be had. The blue line below is Bitcoin's volatility compared to the USD, and the purple line is gold's volatility compared to the same. Measurements use the daily standard deviation over the preceding 30 day window.