What if price matters a lot? \ stacker news ~bitcoin

3763 sats \ 36 comments \ @hynek 26 Oct 2023 bitcoin

Bitcoin is not just about price.. 1 BTC = 1 BTC or if you want 1 sat = 1 sat. We want to focus on building and we are interested in price only in the very long term. Whenever I talk about bitcoin, I try to focus on its great features. Like that you can send it to anyone without asking for permission. No one can manipulate the amount of it. And so on... But what if price matters quite a lot? It seems to me that bitcoin adoption and its overal success doesn’t depend primarily on technology. The social dimension of bitcoin is crucial. If other people don't trust bitcoin, I can't even send it to them - because they won't be interested to accept it. Nobody changes the amount of bitcoin issued but if its price goes down over many years, that doesn't satisfy me. I wanted bitcoin to protect me from inflation. I don't need to get rich, but if it doesn't protect my savings in the long run, it fails in my eyes. As a result, bitcoin is also best explained through the price. I'll send someone a few bugs and ask them a year from now what their bitcoins are worth. You know the amazement when they are suddenly worth more. It's not winning the lottery, it's just a relatively small appreciation compared to a rotting fiat.

Bitcoin's price is still easily contestable. Some clowns deal with paper bitcoin and it can still move the price by tens of percent. My point is that bitcoin hasn't won yet. Bitcoin needs to evolve not only technically, but also to build the confidence that it beats any alternative currency in the long run.

Bitcoin has been with us for almost 15 years and I think it's time to have bigger ambitions. It should no longer be enough that it technically works. If we focus on price, we can easily lose. But we can also win because of it. We need it to be able to protect people's savings over shorter and shorter periods. Now bitcoin will protect savings reliably over a horizon of about 3 years. In other words if you wait 3 years, you'll be better off than with fiat. Hopefully we will soon get to a state that protects funds safely even on a 1 year horizon, and eventually we will get to 1 month. After all, the competition in the form of fiat and altcoins is so so bad.

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1018 sats \ 4 replies \ @SpaceHodler 26 Oct 2023

Price doesn't matter, but purchasing power does.

If 1 BTC buys me a car today, and less than a car in 10 years, it's not serving as a SoV. If it still buys me a car in 10 years, it is. If it buys me a better, newer model, its fixed supply is also doing its job of allowing me to share in the benefits of the world's growth. I wouldn't want to buy a 2023 smartphone in 10 years for the same sat amount it costs today.

Also, early adopters, taking on more risk, can justify reasonable expectations that its purchasing power will grow faster than merely to catch up with the world's growth. That it will grow not only due to the fixed supply, but also increasing demand, a.k.a. adoption.

205 sats \ 1 reply \ @SimpleStacker 26 Oct 2023

This.

Price matters if you define price as the exchange rate between bitcoin and other goods. After all, what is the point of bitcoin if we don't use it in exchange for other goods? And one of the things we like about bitcoin is that its value won't be depreciated relative to other goods by endless printing.

However, the way I would phrase it is short term price fluctuations don't matter. So the people who constantly stare at the ticker price and obsess over it are wasting their time. Short term fluctuations can happen for any number of reasons at this early stage. In the long run, Bitcoin is the superior monetary technology and will be adopted

1 sat \ 0 replies \ @SpaceHodler 26 Oct 2023

I would say fiat price doesn't matter, regardless of whether it's short term or long term. I'm not interested in whether bitcoin goes to $1m by a given date, but rather what I can buy for it. If I can still buy a car, good. If I can only buy a bicycle or a pack of chewing gum for that $1m, then I've lost purchasing power.

Short term price doesn't matter, because we're in it for the long haul. Long term price doesn't matter, because price is only a short term proxy for purchasing power.

0 sats \ 0 replies \ @DiracDelta 30 Oct 2023

Contrived circle jerky response, just accept that the US dollar is more than an accurate measure of value -- and if you want to be pedantic, you would normalize to productive capacity of the planet i.e. be smarter if you really want to be a smartass.

0 sats \ 0 replies \ @TwoLargePizzas 26 Oct 2023

I think you're right but unless something crazy happens the price is a proxy for purchasing power anyway. In other words, if it costs 1 BTC to buy a car you can be certain you'd also be able to sell your 1 BTC for $35,000.

That said, in a hyperbitcoinized world we would eventually reach a point where nobody wants to trade BTC for dollars anymore and therefore you could argue it no longer has a price in dollars (it's either zero or infinite, whichever way you want to look at it). In that case, purchasing power is all that's left.

131 sats \ 0 replies \ @siggy47 26 Oct 2023

You make valid points. I posted something about this a while ago, but I haven't read it for a while. I may not agree with everything anymore: #157847

63 sats \ 0 replies \ @TheBTCManual 27 Oct 2023

Price is such a weird thing because we're all looking at it through a different lens, like right now some see 34k, others see it as 30k inflation-adjusted when compared to the first time it hit 30k

Others see it hitting new all-time highs in their local currency IE Argentina or Thailand, while it is still the most attractive marketing tool for getting into bitcoin but I think that the other attributes like self custody and censorship resistance is going to become more important as countries try to crack down on capital flight

51 sats \ 1 reply \ @kepford 26 Oct 2023

I have a friend that has bought bitcoin multiple times and sold it all when market prices fell. He once lectured me with "investment advice" saying you don't buy a stock that is crashing. I told he you do if it is at a discount. You do if you understand that it has value that most do not see. I could see the wheels turning in his head as I said this. I continued, I have studied bitcoin, used the tools, I know it has value far greater than what the market price reflects. Its not insider knowledge because anyone can do the homework but its like that.

Price does matter. It is a signal for the current market's view on an asset. To say it doesn't matter at all is foolish and anti-economic. But anyone who is a long term hodler and exchanges their fiat for BTC doesn't view price as important as the average fiat maxi. As the world discovers the true value of bitcoin the exchange rate of bitcoin will continue to rise. As fiat currencies fail it will rise. As adoption increases it will rise. Price is a metric. It is not the true measure. The truth is bitcoin is priceless. Might be a good idea to get some.

42 sats \ 0 replies \ @aoeu 27 Oct 2023

I use the analogy that if you are walking in a grocery store and see your favorite food on a great sale, you'll probably stock up on it. Likewise, if your favorite food went up in price a ton, then you'll probably hold off buying it or not buy as much.

For some reason and for some people stocks and bitcoin are treated differently. Everyone wants to buy when prices are going up and sell when prices are going down.

122 sats \ 2 replies \ @birdeye21 26 Oct 2023

Ultimately, price does not matter, but price IS everything for normies which we agree on.

Nothing else said about bitcoin would matter if it traded like a shitcoin. You need constant NgU to both validate everything said about bitcoin and clearly demonstrate how hard money trends against soft money. You need fiat normies to understand that, $$ price is the most translatable metric.

bitcoin is also best explained through the price

Only disagreement i have here. At the end of the day, price teaches you NOTHING about bitcoin, other than the fact that it's getting more expensive. Like you said, $$ price can be manipulated easily. What if the price went down over that year? Certainly wouldnt be teaching them how bitcoin is an inflation hedge. Those sats you give your friend will just end up in a CEX's hands if they don't understand why bitcoin gets more expensive over time.

Let the price hook you, then forget about it to learn about bitcoin

263 sats \ 0 replies \ @evanbaer 26 Oct 2023

Let the price hook you, then forget about it to learn about bitcoin

100% this

42 sats \ 0 replies \ @hynek OP 26 Oct 2023

Good point 👍

10 sats \ 0 replies \ @Michelson_Morley 28 Oct 2023

I can't believe there aren't any Austrian / Von Mises people in this thread! I thought theyd be common.

Price is extremely important: It is the collective honest judgement of subjective valuation by millions of people. The purest form of swarm intelligence.

Price isn't hard to understand, but it is fascinating and will change the way you see the world.

ELI5: First, understand that "value" is not an objective thing. Every person values a thing according to their subjective experience. If I go to a south-american tribe with gold, but find that their religion forbids shiny metal, then the value of gold for them is zero. For me it´s not! So I'm gonna try to find a better market.

This is why Free Markets and Free Speech are the cornerstones that you always hear us austrians talk about. Both Marx and Adam smith believed that price was intrinsic somehow, marx thought it related to the labor required to create the thing, smith (who called this true price the "natural price" as opposed to the current "market price", expressing it in this way:

the 'natural price' of a good identifies the product's price, which is equal or almost equal to the amount required to cover all the costs of the supplier such as rent, labor wages, cost of production, and processes

Both are wrong. What is the objective price of something? It is what someone is willing to pay for it. The market price is the only price. Bigger market, better price (as in, more accurate). More perspectives, more vision. Regulate the market, control the price manually, you create a lie that affects the entire nation. Why did communists starve? Except for killing experts. Well, the price of food had to be "fair". Based on labor, but as everyone needs it, it must be cheap. But then farmers couldn't afford to work. Then the people who built equipment for farmers were out of business, and so on until full collapse.

12 sats \ 2 replies \ @DarthCoin 26 Oct 2023

price matters only for fiat maxis (aka shitcoiners). Simple as that

11 sats \ 1 reply \ @hynek OP 26 Oct 2023

I hold almost zero fiat. Only very small amount for emergency moments. At the same time I want to cooperate with other people. Even if we transfer bitcoin, we communicate the price mostly in fiat. But we will get there..

41 sats \ 0 replies \ @DarthCoin 26 Oct 2023

10 sats \ 4 replies \ @Danny_stacks_sats 26 Oct 2023

It's hard not to care about price at this stage. No one likes feeling like they lost money. So a drop in price especially after a buy feels like a bad decision. On the flip side when the price goes up people regret not buying more or they feel good because they have more of their local currency (if they sell) since everything is priced in their local currency its hard to ignore price.

21 sats \ 3 replies \ @TwoLargePizzas 26 Oct 2023

Bitcoin is money. You only lost money if you sell your Bitcoin.

I know this is a hard concept to wrap your head around when you've been thinking in dollars your whole life but once it clicks you'll see things very differently.

0 sats \ 2 replies \ @Michelson_Morley 28 Oct 2023

It's a hard concept to wrap your head around because it isn't true. If I sell my bitcoin for some asset/commodity that I can use to trade for something else I want, then the asset/commodity can be even something like a fancy chair. Money is a medium of exchange.

To steelman your argument though, I believe what you're saying is that there is bad money and there is good money. How many things can I buy with a fancy chair? Bitcoin is one of the best (maybe the best) kinds of value-storage out there, because it is incorruptible (currently).

But bitcoin is not good money, to be a bit semantic. Its price fluctuates wildly. A dollar may inflate, but it doesn't suddenly become 400 dollars, then suddenly 4 dollars. I'm not sure if any other cryptocurrency (i dont count stablecoins, PoS, etc) that has become stable.

Bitcoin especially though, is propounded by speculators (who call themselves investors) as always going to be increasing in price. Why would you use money that is worth more tomorrow?

100 sats \ 1 reply \ @TwoLargePizzas 31 Oct 2023

Its price fluctuates wildly.

It's price fluctuates wildly measured in dollars. Yes, but this is not unique to Bitcoin. There are plenty of other currencies that fluctuate when measured against US dollars. As an extreme example, the Argentine Peso lost way more value (relative to dollars) in the last year. You might think this is a silly argument, but it's a very real reality for people living in Argentina right now.

Again, measuring any money against USD isn't really an argument to decide if it's money or not. Technically anything can be traded for anything else, but as you said, some things make better monies than other things.

it doesn't suddenly become 400 dollars, then suddenly 4 dollars.

You're being a little dramatic. Bitcoin has never gone down 99% in it's history. Secondly, there's nothing sudden about it. It took over a year to drop 70% in the last cycle.

Why would you use money that is worth more tomorrow?

You're actually right about this. People use the weakest money they hold as a medium of exchange. However, this is only true if you hold multiple monies. There are people that have gone all in on Bitcoin and they spend it just like any other currency.

0 sats \ 0 replies \ @Michelson_Morley 1 Nov 2023

Yes measured in dollars you are quite right. That's not what price is though. Nothing has intrinsic value, in the sense that binds it to price. Bitcoins price—its collectively summed up perceived value by all actors on all markets— fluctuates more than the dollar. How many cows is a bitcoin worth in a year? How many dollars is a cow worth in a year? This is what i mean by unstable, "bad intermediary of change".

It's also a good point in favor of bitcoin maximalism. Regardless of if any other coin has better qualities in every way (cough monero cough) the goal we are trying to achieve is replacing fiat with unmanipulable money. And bitcoin is 10 times stronger than monero at least.

Yes i was being hyperbolic. But do you see people online going "The US dollar hasn't even reached 1% of it's potential!!! I'm HODLing dollars until 1 dollar is worth 100000000000 euro!!!!!!!" ? Not great intermediary of exchange. But not a disqualifying point either. Bitcoin is gold, store of value. Lightning can be the money.

10 sats \ 1 reply \ @SATsStandard 26 Oct 2023

For me price only matter when it's goes down,

Cuz more BTC dip more SATs to stack

@Sn also shows you on top of the page

Block 1 SAT = 1 SAT SATs per $

Stay humble, stack sats.

0 sats \ 0 replies \ @crrdlx 26 Oct 2023

Yup, we'll all be dealing in satoshis in the not so far future, I'm convinced.

Along those lines, I made this app in 2013 and wrote this in 2017: https://sbc-v7.on.fleek.co/pages/satoshiday.html

1 sat \ 0 replies \ @PRA3S3NT1A 27 Oct 2023

You are better of after the first day however it may not represented in the price. In a stable economic environment 2% inflation means it is okay. But it is not. You still loose 2% of your purchasing power every year. Moreover, I do not want to save money in an ever expanding money supply. Do not forget that we only talking about reported numbers by gov. We do not really know the real inflation and how much money is in circulation. All of this is a scam...

1 sat \ 0 replies \ @southside263 26 Oct 2023

people are greedy.
price matters for precoiners / traders / new investors / etc

1 sat \ 0 replies \ @nicosey 26 Oct 2023

Bitcoin is made secure due to price

0 sats \ 0 replies \ @endothermicdev 27 Oct 2023

The range of price variability has been gradually decreasing over bitcoin's existence. If you plot the price on a log-log chart this stands out. At the present rate, the upper and lower bound of the price range appear to converge sometime in the 2060's. I think this is mostly a function of liquidity and how widely bitcoin is held. At the end of the day, it's broad adoption that will drive price volatility down, with the global unit of account being the least concerned with this metric. The future is unwritten, but I think price will continue to get more boring in the coming years. However, given global monetary and macroeconomic issues, the path to get there may not be a straight line.

0 sats \ 0 replies \ @lightwalker 27 Oct 2023

0 sats \ 0 replies \ @Muuny 26 Oct 2023

this is the easy paragraph of the 1hour to 100hour question.

0 sats \ 0 replies \ @designsats 26 Oct 2023

"Hopefully we will soon get to a state that protects funds safely even on a 1 year horizon" - not sure about this. I dont want to expect market cycles to disappear anytime soon

0 sats \ 0 replies \ @2bithits 26 Oct 2023

Bitcoins purchasing power will generally low in an upward direction as long as adoption continues.

0 sats \ 0 replies \ @Cowboy 26 Oct 2023

Price matters for Shitcoiners!

All i can say is : 1 BTC = 1 BTC 1 SAT = 1 SAT

0 sats \ 0 replies \ @MattInTech 26 Oct 2023

I see this as a chicken/egg problem to be honest. As a Bitcoiner, I do agree to 1 sat = 1 sat and the fact that, ultimately, price should not matter. To foster adoption among normies, however, price is a fundamental factor that's impossible to neglect. The more people will se growth, both in terms of price and adoption, the more demand will hit the market as people see that Bitcoin can be used, which will drive price up again, etc.

0 sats \ 0 replies \ @lightwalker 26 Oct 2023

The price of items in your country are priced in your local currency. Bitcoin is sovereign. Let the price be in Bitcoin. The price, which matters is 1 BTC = 100m sats.

0 sats \ 0 replies \ @notgeld 26 Oct 2023

Price is important since it is the only way to measure bitcoins purchasing power in a large scale. It is what it is due to absent commodity and derivatives markets that price everything in Bitcoin.

0 sats \ 0 replies \ @SaToSHiWoMaN 8 Mar outlawed

stackers have outlawed this. turn on wild west mode in your /settings to see outlawed content.