El Salvador is trying to use it a currency. Well, I still wouldn't consider it a currency since pretty much everything will be priced in dollars, but they are using to transfer value. One of the man reasons for this was to send home remittances.
Many people still believe Bitcoin could at least be used to transfer value, like a currency. AMC, Starbucks, and United Wholesale Mortgage are all looking into accepting it. Whether these come to be seems to be seen, but there is obviously a lot of people that still expect Bitcoin to be a currency, or at the very least a way to transfer value.
More accurately, after years of failing to be viable as a currency the salespeople started claiming the goal had never been replacing cash and instead was some sort of poorly defined “store of value” instead of what they’d spent the previous decade spinning stories about.
Since a real reserve currency is stable and backed by consistent demand, it’s unclear why anyone expects a pure fiat currency backed only by a small community of speculators to be successful.
Well, not really. BTC was sort of usable as a currency to a point. You could even buy games on Steam with it.
But it had a 1MB block size limit, which was initially implemented to prevent spam. This was obstinately kept in place, and that quickly destroyed its usefulness as a currency -- since now there's a lot of contention, transacting is slow and expensive. This doesn't bother the people who want an asset to buy once, but makes it useless as a currency.
It was technically possible but nobody seriously did it because the transactions were very slow and fees were massive compared to everything else, not to mention that the deflationary design meant that anyone who did would be mocked for not having held on until the value went up. Remember all of those comments about people buying a pizza with what a few years later would have been thousands of dollars? That sealed its fate as a currency because anyone who has an alternative will be better off using it as long as speculators are pouring money in.
I was using bitcoin as a currency where I could in 2015. 'Seriously'. There were lots of restaurants, businesses, and even people who would accept it for payment, and transaction fees were completely reasonable. There is a lot of corruption and perverse incentives in Bitcoin governance, and I don't use it or hold it at all anymore, so I don't know how feasible it is to actually use as a currency now, other than that the fees are out of control, but I think it's unfair to say 'nobody seriously did it'.
I think most of the people still tied to proof-of-work crypto despite the massive environmental concerns which have become obvious more recently, have switched to a variety of other platforms, bitcoin cash being the closest one to bitcoin (but without the block-size constrained, allowing basically fee-less transactions, though you still have to wait for confirmations)
For full disclosure, I don't hold or use any proof-of-work crypto now (other than perhaps Nano, which is sort of a hybrid that has very small proof-of-work performed by the user making the transaction, and proof-of-stake at the validation/confirmation layer)
I was using “seriously” in the sense of enough volume to be inconvenienced if the system disappeared. There were a handful of businesses around here accepting Bitcoin but it was a small fraction of their sales and I believe most of them said they were converting it to USD immediately.
I heard about this from a few people I knew who tried it but stopped because it was slow and they felt it was more profitable to hold Bitcoin. I’d be quite happy to have Visa/MasterCard see more competition but this didn’t seem like it was ever going to reach that point.
Fees were tiny before it hit the block limit. If you look at the stats before the blocks started filling up, the average fee was around 5 cents USD. Massive fees only started once the blocks started filling up.
And yup, the deflationary model certainly favors not using it as a currency.
Some people relying on 2017 price peak news headlines haven't gotten the memo that fees only spiked temporarily.
Fees are currently 5-10 cents to get in the next btc block and most lightning network transactions complete in 1-2 seconds and cost 1 cent or less in fees.
The speculators want to make money and they don't care how they get that money so they imagine something stupid like a major country adopting it as a reserve currency.
Using El Salvador as an example would be funny because they use Bitcoin as a life raft for remittances, not because the currency is a good fit for day to day transactions.
BTC is not like a bond at all. A bond is a collection of future cash flows (coupon payments) and a principle payment at the end (or for savings bonds/t-bills, you are buying one future payment for a discount).
BTC has no intrinsic value or cash flows or earnings or assets or..
Would you prefer comparing it to gold ? Art ? collecting sneakers ? or Comic books ? how about buying land ?
Edit: I should probably clarify..People buy/collect lots of things in the _HOPE_ they'll increase in value. BTC and crypto in general is not unique in that regard.
Gold, art, sneakers, comics— yes, those are comparable to BTC. Land is not, as land investments are usually based on future cash flows, which BTC doesnt have.
It's marketed as a store of value. The fact is value can't be stored reliably anywhere. And storing it in a purely imaginary asset, of all things, seems about the dumbest idea.
It's different in at least two ways: physical objects provide utility in some way (you can read the book, wear the sneakers...) which means the demand isn't entirely speculative, and they also have a scrap value.
except people routinely pay more then their 'utility' value..so its just as easy to lose money. Not sure what the 'utility' of funco pops are, or the scrap value (same with stamps IIRC - many of them aren't even valid for postage). Stocks typically have no 'scrap' value as well - if a company goes out of biz, the stock is worthless, and these days you generally don't even have the paper certificates to sell for scrap.
Also, the 'value' of art, books, and collectables is rather subjective and fairly volatile. TBH, they seem pretty comparable to cryptos to me. You collect them for fun, hoping the value goes up.
If they routinely pay more than their utility value, it's a good indication that the asset is in a bubble, and therefore not a good investment in the long term. Most assets are not in a bubble. In fact, they can't all be in a bubble. If some assets are overpriced, then other assets must be underpriced.
Stocks don't have scrap value because they're a financial derivative, whereas we were talking specifically about physical assets. A stock is a claim on a company's equity, and the company equity is defined as assets minus liabilities. Obviously if assets < liabilities, then equity is negative, but that doesn't contradict the assertion that physical objects have scrap value, which was my claim.
Bitcoin is not a derivative, because it has no underlying. It's not a commodity either, because it doesn't exist. It's an imaginary asset, like fiat money. But unlike fiat, Bitcoin doesn't work as money, so it really has no use-case other than be used as a speculative asset. It's a bubble asset.
My understanding is that they are trying to use the Lightning Network. Though my brief googling of this only shows speculation that this is the case, rather than confirmation.
Yes, Bitcoin promoters are fully aware that the Bitcoin blockchain is unsuitable for any practical purpose, so they started working on a replacement, the so-called Lightning Network, but it turns the LN is even less likely to work than the Bitcoin blockchain. See this video for some if its fatal design flaws https://www.youtube.com/watch?v=pOZaLbUUZUs
Lightning Network is an abomination. The company behind it, Blockstream, actively suppressed the movement to increase the block size, which led to the bitcoin cash fork.
Many people still believe Bitcoin could at least be used to transfer value, like a currency. AMC, Starbucks, and United Wholesale Mortgage are all looking into accepting it. Whether these come to be seems to be seen, but there is obviously a lot of people that still expect Bitcoin to be a currency, or at the very least a way to transfer value.