Post
Topic
Board Economics
Re: Global Financial Crisis scenarios
by
Erdogan
on 24/07/2014, 00:35:00 UTC
Fiat is a store of value, but not a good store, as the value evaporates with time. Other money, with a near stable value, is better. Bitcoin is more risky as it can go down further, but since it can also appreciate, it can be described as stable with volatility, or stable with a risk. But I expect the value to go up as far more likely than to go down, so as a store of value it is far better than stable money.

What you're describing is a good investment, not a good currency.  Bitcoin is anything but stable.  Stable plus a little volatility is what the price of a bitcoin on Bitstamp has been for the last few days: it's oscillated only a few dollars around $621 or so.  For normal currencies, a 1% change is big deal.  Look at that article about Venezuela.  60% inflation is insane.  Compare that to the 7000% that bitcoin has gone up in the last 2 years.  You can't tell me that bitcoin is stable.

I didn't.
Um, yes you did.  See the bold text from your previous comment.

Once more. Dollar is perceived as stable, but slowly depreciates at 1.5% to5% per year. That is maybe stable day to day, but it is not at all stable over a decennium.

Bitcoin is designed to be stable over decennia, but is currently not stable day to day. There is a risk of 10 % down at any day, but after 10 years it is either stable or going up. So it is stable over some longer period, but it is volatile day to day. So, it you can stomach the day to day risk, it is stable over 10 years or even 3 years. Better than that for savers, it is expected to go up, even if there is a day to day risk.

I don't care to feed you with a teaspoon on this any more. Take it or leave it.