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0 sats \ 2 replies \ @Michelson_Morley 28 Oct 2023 \ parent \ on: What if price matters a lot? bitcoin
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?
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.
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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.
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