> People are worried about losing $X0,000+ as the next random exchange or cryptocoin-service collapses randomly.
I read this somewhere and it rings true - centralized exchanges are like public toilets. Try to avoid them as much as possible. If you have to use them, get in, do your job quickly and get out. Use such exchanges only to buy Bitcoin with your fiat and then move that bitcoin to your own wallet. In a lot of countries, it is much easier to maintain your own wallet compared to preserving your wealth via other means. I have compiled some real world examples here: https://news.ycombinator.com/item?id=32406095
> Yes, the banks collapsed, but no one actually lost any money over it.
If everyone lived in the US / Canada / Western Europe, maybe. What about people in Venezuela, Russia, Turkey, Iran, China or Sri Lanka. From the article I shared above: "Yet crypto use in Pakistan is nevertheless active, as people are reportedly converting their salaries into stablecoins to prevent currency erosion. The rupee has dropped more than 20% against the U.S. dollar year-to-date, more than 30% over the past year. Meanwhile, BTC in rupee terms is up 103% so far in 2023 (vs 63% in U.S. dollar terms). It’s probably not a coincidence that a 2022 report from forensics company Chainalysis placed Pakistan 6th in terms of global crypto adoption."
I sometimes feel the visceral reactions to Bitcoin are mainly from people who have experienced only great governance. They simply fail to see that Bitcoin[1] is a lifeline for a lot of people trapped in shitty places.
[1] and every diehard Bitcoiner will agree with you: don't buy shitcoins. not your keys, not your coins. centralized systems should be avoided or else minimally used.
And when BTC Transaction fees climb to $30, like they did a couple of weeks ago, then what? We just stop transacting?
Centralized exchanges are a natural result of the absurd transaction fees that the BTC community refuses to fix. If it costs $30 to make a transaction, it makes more sense to centralize and perform off-chain transfers of BTC.
Even today, where the BTC Transaction fee has dropped to "only" $3.60 / transaction, many natural uses of BTC are simply priced out. At least... using a hardware wallet is priced out. A centralized exchange which performs off-chain transactions doesn't have to pay of course.
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The price of Magic the Gathering Black Lotus just keeps rising higher and higher as well. But no one actually plays with the card in practice. Similarly, since BTC transaction fees are denominated in... BTC... the higher the BTC price, the higher the transaction fee, and the less likely everyone is to use the base system.
Seems like lose-lose over the long term. The only ones who want to buy BTC are speculators. Everyone who wants to "use" it for transactions is priced out, or rug pulled.
It doesn't have to be like this by the way. But its like this because the community doesn't care.
> Price (in the long run) is all that matters.
The Yen is 1/100th, or less, than the Dollar. No one doubts that Japan is still an economic power.
As far as currencies go, I think people care about the number of transactions. How much trade occurs with the currency? There's also a desire to keep prices consistent, rather than going up or down over time (too much inflation, and too much deflation, is both bad. A balance of keeping prices steady is best).
With regards to the Stock Market, companies mostly care about IPOs and SPOs, how many $Billions they can raise by selling stock. Trade volume is kind of a side-show, and even price is a side-show and easily manipulated (see BRK.A shares, which are overpriced on purpose... by having fewer shares control a larger % of the company)
> And when BTC Transaction fees climb to $30, like they did a couple of weeks ago, then what? We just stop transacting?
If it is akin to one-time transaction of buying gold as a safe asset, then people gladly pay 30$. Even in poor countries. If you want to use BTC to buy coffee, then 30$ transaction fee is a hassle. But trying to judge the merits of BTC on how easily you can buy coffee with it is as dumb as trying to judge a fish by its ability to swim. They are not meant for that activity.
> The Yen is 1/100th, or less, than the Dollar. No one doubts that Japan is still an economic power.
Sure and it has been in that range for the last 30 years. It has held its value which actually proves my point that Yen is backed by some good governance and hence Japanese citizens may not actually need BTC. Now look at Zimbabwe where government printed 100Trillion bank bills and the currency's value was destroyed in a few years. That is the target market for BTC.
> Now look at Zimbabwe where government printed 100Trillion bank bills and the currency's value was destroyed in a few years.
Why can't they use US Dollars or Japanese Yen instead?
And if they're a country like Argentina where they print a ton of money and then ban US Dollars/Japanese Yen (etc. etc.), what prevents them from banning BTC as a means to protect the local currency?
Either the country is working in the global economic system (and therefore has access to global currencies like USD / Yen / etc. etc.), or it isn't and its probably cut off (including from BTC).
> But trying to judge the merits of BTC on how easily you can buy coffee with it is as dumb as trying to judge a fish by its ability to swim. They are not meant for that activity.
At larger than $1000+ valued denominations, you've now got the problem of counterparty risk, because BTC organizations disappear every few months. Who and/or what are you buying in BTC, and why do you trust that the other guy is going to keep existing 6 months from now? Even large companies like FTX turn out to be shams and disappear overnight.
Why do you want to transact with denominations of that size with people who are clearly untrustworthy?
On the other end, trying to use smaller denominations to experiment and grow the community... we have the random price of transactions (ex: $30) that prevents the use of cup-of-coffee-like transactions.
So BTC is dead on the small-end due to transaction fees. And its dead on the high-end due to unreliability of the community. What exactly should I use BTC for?
> Why can't they use US Dollars or Japanese Yen instead?
If you burnt by your own government, chances are you will not trust a foreign government either, especially the one which has a recurring record of bullying other countries and freezing dollar assets for foreign entities over geopolitical matters. There is a reason why Gold is so popular world over - people had shitty rulers for most of our history and they trusted no one, not even a benign ruler from some other country.
> its probably cut off (including from BTC).
You can't cut off BTC. That's the beauty - as long as you have internet, you can use BTC.
> Why do you want to transact with denominations of that size with people who are clearly untrustworthy?
Strawman. I didn't propose that at all.
> And its dead on the high-end due to unreliability of the community.
No it's not. You can store your wealth in BTC and use it sparingly with trusted parties, just like people have done it with Gold for centuries.
> What exactly should I use BTC for?
Store of value. Just like Gold. Con: it doesn't have long history of Gold. Pro: it is much easier to transfer or take it with you (just 12 words) when you are fleeing.
Most of the Bitcoin believers. They buy Bitcoin because they believe its value will be higher than the worthless currencies they have to put up with. See the latest news: https://www.coindesk.com/consensus-magazine/2023/05/22/why-t...
> Seriously. Its not that important.
Price (in the long run) is all that matters.
> People are worried about losing $X0,000+ as the next random exchange or cryptocoin-service collapses randomly.
I read this somewhere and it rings true - centralized exchanges are like public toilets. Try to avoid them as much as possible. If you have to use them, get in, do your job quickly and get out. Use such exchanges only to buy Bitcoin with your fiat and then move that bitcoin to your own wallet. In a lot of countries, it is much easier to maintain your own wallet compared to preserving your wealth via other means. I have compiled some real world examples here: https://news.ycombinator.com/item?id=32406095
> Yes, the banks collapsed, but no one actually lost any money over it.
If everyone lived in the US / Canada / Western Europe, maybe. What about people in Venezuela, Russia, Turkey, Iran, China or Sri Lanka. From the article I shared above: "Yet crypto use in Pakistan is nevertheless active, as people are reportedly converting their salaries into stablecoins to prevent currency erosion. The rupee has dropped more than 20% against the U.S. dollar year-to-date, more than 30% over the past year. Meanwhile, BTC in rupee terms is up 103% so far in 2023 (vs 63% in U.S. dollar terms). It’s probably not a coincidence that a 2022 report from forensics company Chainalysis placed Pakistan 6th in terms of global crypto adoption."
I sometimes feel the visceral reactions to Bitcoin are mainly from people who have experienced only great governance. They simply fail to see that Bitcoin[1] is a lifeline for a lot of people trapped in shitty places.
[1] and every diehard Bitcoiner will agree with you: don't buy shitcoins. not your keys, not your coins. centralized systems should be avoided or else minimally used.