BITCOIN

Adyinvestment

Gary1984 said:

Adyinvestment said:

My mate paid for my fish and chips a couple of weeks ago with Bitcoin, I would say that was a pretty normal transaction.

The instability of the Bitcoin value is irrelevant for the retailers (in fact they would not even know Bitcoin was used) as the retailer will always get the fiat amount they are due.

Ah, so your pal converted some bitcoin to Sterling and paid for it with that?

I could probably buy a meal in a restaurant in most countries in the world with my Nationwide debit card. Doesn't mean they've all started accepting Sterling.

Well, by your own argument that would mean that Bitcoin can be just as useful as Sterling for general purchasing outside the UK? His card has zero exchange fees so probably better in this comparison.

Thrugelmir

Adyinvestment said:

Gary1984 said:

Adyinvestment said:

My mate paid for my fish and chips a couple of weeks ago with Bitcoin, I would say that was a pretty normal transaction.

The instability of the Bitcoin value is irrelevant for the retailers (in fact they would not even know Bitcoin was used) as the retailer will always get the fiat amount they are due.

Ah, so your pal converted some bitcoin to Sterling and paid for it with that?

I could probably buy a meal in a restaurant in most countries in the world with my Nationwide debit card. Doesn't mean they've all started accepting Sterling.

Well, by your own argument that would mean that Bitcoin can be just as useful as Sterling for general purchasing outside the UK? 

Who wants to hold a currency whose value could have fallen in the time you've entered the restaurant to the time you need to pay the bill. 

Adyinvestment

Thrugelmir said:

Who wants to hold a currency whose value could have fallen in the time you've entered the restaurant to the time you need to pay the bill. 

Isn't that the case with any currency in a foreign country?

Frequentlyhere

Just to cover off a few points from Darren's reply to me:


"Tether is a liquidity instrument. Its a means of exchange that facilitates trade but that doesn't necessarily change the price of a store of value like BTC"

Can I hold you to that? If Tether goes completely TU, are you saying that Bitcoin won't be substantially affected as it's a store of value?  

"People under 40 invest in crypto in equal proportion to those who invest in the stock market"

Where's that from out of interest? If true, I'm not sure it's really relevant as lots of people under 40 have pensions invested in the stock market, so they might have £50 in bitcoin and £50k in their pension (and very few in reverse). Even putting that aside, I'm surprised by that, so would be interested to see the source.

Re: yield/dividends/profit/cash, as per @Thrugelmir 's point, I think the bottom line is that you can't sit on currency and watch it appreciate without some other currency losing out. You can't do it with £, or with $, and if we give Bitcoin the dubious right as a currency you can't with that either. Its gains come from greater fools, of which there seems to be a dwindling supply at present.

And one from @HCIMbtw

"A. Because DeFi platforms like CeFi (banks) are actually businesses that loan and offer products, invest money and generate an income, they can use to offer customer benefits on holding assets with them, giving them liquidity and helping them maintain/grow business"

The differences being that DeFI is unregulated, that these platforms often have rather the propensity to instead steal lots of funds rather than invest them, that when they don't it's not uncommon for said invested funds to be invested with leverage in more crypto at huge levels of risk, and that no real world business wants loans in crypto, they want them in cash so they can actually do something with it.

Crypto 'investors' often like talking about asymmetric risks, well I'd say lending out crypto is one of those where you might get 6% on your investment or you might lose the lot. That's not the type of asymmetry which particularly appeals to me.

Frequentlyhere

Adyinvestment said:

Thrugelmir said:

Who wants to hold a currency whose value could have fallen in the time you've entered the restaurant to the time you need to pay the bill. 

Isn't that the case with any currency in a foreign country?

No. The £/$/Euro very rarely dip 10% over the duration of a long lunch.

Zola.

There is of course a flip side to that - paying in bitcoin during a parabolic run or realising longer term gains and essentially eating for free. 

Adyinvestment

Frequentlyhere said:

Adyinvestment said:

Thrugelmir said:

Who wants to hold a currency whose value could have fallen in the time you've entered the restaurant to the time you need to pay the bill. 

Isn't that the case with any currency in a foreign country?

No. The £/$/Euro very rarely dip 10% over the duration of a long lunch.

The correct answer is Yes

Saying one can fluctuate more than another doesn't change the answer.

Gary1984

The degree of volatility is clearly important and Bitcoin's high volatility makes it unsuitable for use in everyday transactions as are being discussed.

There's also the point that by paying in Bitcoin you're introducing currency risk for no good reason. My example was buying a meal abroad. But if I want fish & chips in the UK why would it even cross my mind to use anything other than the currency I get paid in and the one the chippie expects to receive payment in (Sterling)?

Gary1984

Zola. said:

There is of course a flip side to that - paying in bitcoin during a parabolic run or realising longer term gains and essentially eating for free. 

So we've gone from:

'You can pay for things in Bitcoin' to 'You can convert Bitcoin to local currency to pay for things' to 'using bitcoin forces you to speculate on its wild wild swings in valuation but you may win a free lunch!'

Zola.

You can do all of those things yes, although you are not forced to do anything...