With the current prices of Bitcoin and the volatily of it, can't people's personal wealth fall away fairly dramatically if they buy it at the wrong time. It has fallen by 34% in three days in the past. It has also risen over 1600% in a number of months. How good a storer of wealth can it be if it has wild swings in value?
If you have a short term time preference, then sure - you have to be cognisant of the volatility. However, over the longer term, it has performed as a store of value. It's entirely logical to me that it needs to go through these phases of price discovery. Think about it - you launch bitcoin tomorrow as a finite asset and it maintains that one price from day one or that price is discovered along the adoption curve?
Volatility is unavoidable and will be a feature of bitcoin for some years to come. By the way, lets not forget that gold has gone through similar volatility in its history but somehow people don't seem to get as animated about that.
Also, is it a replacement of gold or currency? Was it not invented as a decentralised currency that people used to buy stuff with (mainly drugs and weapons on the dark web in the early days)? You'd be made to use it to buy anything these days. Apologies if all this has been discussed already, I haven't read the previous 15 pages of this thread.
It's being adopted right now as a store of value/digital gold. It has the characteristics to take on that role. It is also being used as a settlement layer for larger transactions. Some want it to act as a transactional currency - and it's currently limited in that ability for micro-transactions due to scaling issues. These are issues that are being worked on by developers (by way of layer 2 solutions eg. lightning network). So rather than write it off on that basis, people should be aware that this use case may come back into play. Even if it never does, there's enough depth in that first use case for it to thrive.
In its very early days, yes it was used on the dark web - but that is not the extent to its use case. We've seen growth in its use as a means of exchange in places like Nigeria where capital controls are draconian. I've used it myself in recent weeks to move $ out of a developing country (legitimate $ that was brought in according to the bureaucratic system that exists here) simply because I don't want to go through the bs they have in place to get my money out (because in countries like this, it doesn't feel like its ever your money...and in actual fact, it isn't - it's theirs).
On the subject of criminal use, cash remains the king for illicit trade. Meanwhile, recent studies have shown that no more than 1% of btc transactions are related to illicit trade.
Then of course there's another observation in the Bitcoin,Gold, Fiat Currency menage-a-trois.
Fiat currency value to the average punter is largely ethereal , and has no real physical practical application value. Gold has its physical uses and can be conspicuously displayed as a signal of wealth.
Hard to imagine bitcoin necklaces or Pussy Galore helping BitcoinFinger to corner the market.......
Just sayin'.....
That's a reasonable point. It's been discussed at length here over the last 3-4 years. My own view is that you've more or less stated that it's used as jewelry as a store of wealth. There are plenty of polished rocks that are used to make jewelry - but the interest is in gold because its valuable. It's valuable because its finite. Meanwhile bitcoin is more finite. Bitcoin also offers other advantages ...such as the ability to transmit it globally to whomever you want practically instantly. You can custody it yourself and cross borders with it - without the risk of confiscation.
That's my take - whilst many here take the opposing view. I don't think there's any point in re-hashing that - it is what it is. The only other point I'd make is that there is also a generational shift here in terms of how digital currencies are perceived and I'm sure that's playing in to views expressed here on AAM.