I hope this works out for you in the long term; BTC isn't the most stable platform, but it could certainly be more stable than some national currencies.
If you don't look at the price, it's the most stable and predictable service and protocol in the existence of the internet (maybe after the internet / IPv4). It's uptime is 99.987%, last time it was down in 2013, and the cool thing is that even if it gets down, it has self healing property in the case of network separation / sybil attack.
I dare you to find another internet service (or even banking service) with the same stability.
Also the same software that I downloaded in 2013 still works (although I'm not using it, I have the option to not upgrade).
There was a bail in last month in my country (Hungary) as well: all people who stored their money in Russian banks lost their money over $100000, just like in Cyprus in 2013. They did't even know that their bank was Russian owned. I'm not playing the game of russian roulette with my money anymore.
Well, I've had BTC transactions drop out of the mempool (so, they were not executed, but you don't know that immediately, you only know days later), and transactions that worked took between a few minutes and more than half a day. The fees ranged from virtually nothing to around 50 USD. I certainly would not call that predictable and stable. I mean, you don't even know when the next block will arrive.
I would be suprised if a valid normal transaction with 50 USD would drop out of a mempool. What was the transaction weight? If you send the transaction data, I would be interested to look at it.
I'm usually overpaying (20 satoshis/byte, usually under $1 for a $2000 transaction), and I always get into the first block, but I never pay $50 fee.
Yes, this is true, I'm mostly worried about the elliptic curve signature part, as everything else could be fixed with an emergency hard fork (except SHA256).
Sadly OP_CAT operation is disabled (or substring equality operation), which would make lamport signatures available again for high value transactions. I would love it if lamport signatures would be enabled again (it would be quite easy to do), but I'm afraid that there isn't enough concensus to do it at this point, because some people would think that it's wasteful, and also lamport signatures are dangerous, as they can be used only once.
Bitcoin is an unbelievably stable platform with an uptime of 99.98% with only 13 years to draw from. It's been sticking with it's algorithmically defined inflation rate with perfect predictability, unlike any other currency or scarce asset like gold, which depends heavily on incentives to mine and accessible reserves.
Don't mistake the volatility of the USD price of bitcoin (which is based on the erratic, unpredictability of human emotions and massively distrusted market decision making) with the complete and utter lack of volatility of the actual underlying system.
Inflation (at least in it's common usage) tracks the price of goods, not the supply of currency. While those traditionally affect each other strongly you cannot say that bitcoin has a stable or well defined inflation/deflation curve because the price of goods denoted in bitcoin are extremely volatile.
You can say that the monetary supply is very predictable, but that doesn't do much good if the price of goods fluctuate.
The word is 'inflation' is overloaded to mean both depending on the context.
It can mean inflation of the price of things, which may be driven by supply constraints OR demand changes OR currency debasement. This is notoriously difficult to calculate a single value for, because all goods and services can oscillate wildly in prices in both direction. Electronics and mass produced things are a strongly deflationary good because they're constantly becoming less scarce while food, education, health care, and housing are significantly inflationary in price, because they're not getting less scarce at faster than demand.
It's impossible to give single CPI style inflation number that isn't deceptive in some way, because to do so, you have to put every person in a box and declare a "standard" basket of goods that everyone is expected to consume. But reality is messy, so my basket of good is likely going to be quite different from yours. Everything from diets, the types of education and housing we choose, the transportation choices available to us, our reproductive choices, and the hobbies we pursue can be radically different, which can mean that your "true price inflation" can be radically different from my "true price inflation" and both radically different from official and heavily manipulated government CPI numbers.
Inflation can also mean the inflation of the currency supply. This is the more traditional definition, and it gives a simpler way to understand whether prices for goods and services are rising because of changes to supply and demand, or if the prices of goods are rising because there's suddenly a lot more units of currency available to chase those scare real things. And of course, when it becomes clear that it's the currency getting rapidly debased, people start hoarding the actually scarce goods and resources, because the money is becoming toilet paper, and that's bad for all of us, because hoarding scarce real world resources that we don't need right now is bad for all of civilization.
In this sentence traditional can either mean "old" or "common". If you meant "old", then I agree, but currently it is not the more common one.
For the sake of clarity, if you only meant the more narrow definition of currency supply inflation in you parent comment then it's probably good to say so.
Saying that bitcoin has a stable algorithmically defined inflation rate is a hilarious redefinition of terms. Over the last year, one Bitcoin lost approximately 40% of its purchasing power relative to a basket of consumer goods and services. The year before, the opposite happened with bitcoin increasing in purchasing power by a factor of 5-10x.
,,A historical look at the origin and uses of the word inflation, arguing that although the term has become nearly synonymous with "price increase," its original meaning - a rise in the general price level caused by an imbalance between the quantity of money and trade needs - is the definition driving many of those who advocate an anti-inflation policy for the Federal Reserve.''
Austrian economics still uses the original meaning of inflation (increase in monetary supply), while Keynsian economics uses the change in consumer price index, or more broadly the change in prices.
I prefer to always distinguish the two by writing monetary supply inflation and price inflation instead of just writing inflation, as this conflict between definitions always comes up.
The mathematical certainty of the issuance of BTC won't really mean much if nobody wants to trade it for goods. BTC's volatility is not just volatility w.r.t. USD.
The value of anything as a medium of exchange and store of value always depends entirely on whether or not a critical mass of people want to use it as such. Once you establish that a thing satisfies all the properties of money, or close enough, then the only question is network effect. Even if minor theoretical improvements could be made, it has to be 10-100x better to overcome runaway network effect.
Sea shells and bags of salt were drastically better money than mentally keeping track of favors owed in a small tribe, because we could expand our exchange of favors beyond dunbar's number to cooperate with people we don't intimately know. Gold was much better than sea shells and salt because it's globally scarce and durable. Paper backed by gold was much better than raw gold, namely because it is drastically easier to trade, transport, and fractionalized.
The technical nature of bitcoin isn't special and it can be trivially forked, modified, and a new network started for near zero cost. That's exactly what coins like litecoin and dogecoin did. Copy paste bitcoin code, change the name and some constants, and boom, new money. What makes bitcoin special, and why there can only be one dominant cryptocurrency long term, is network effect. I don't care about litecoin and dogecoin, because barely anyone uses them relative bitcoin. Barely anyone is developing and building on them as a foundational layer. The only reason anyone cares about dogecoin these days is because one eccentric billionaire has a hard on for it, and that's way too small of a bus number to store a significant amount of my wealth in.
The same holds true for any network protocol. I can copy paste libraries for TCP and make modifications that I think will make it far superior to the current form and release it to the world! And nobody except hobbyists will use it because standard TCP has an unassailable network effect. You have to have an extraordinarily compelling reason to change, and even then it will take decades (see IPv4 to v6 transition for example).
The thing about bitcoin, is that it is the first truly digital money. Fiat currencies like the USD have been trying for decades to pretend to be digital, and they'll probably try harder to use blockchains to make it better, but ultimately it's still fundamentally stuck with an analog foundation defended by guns and tight cliques of trusted human gangs, which makes it globally weak relative to bitcoin. That's why bitcoin has a 10-100x advantage over dollars long term. It's natively digital, open, and permissionless from day one.
"BTC will eventually crush dollars" and "BTC is not volatile because 1BTC = 1BTC" are very different claims. Even a bitcoin maximalist should recognize that the value of BTC when trading for good and services has swung dramatically over time. Maybe that will happen less over time but the volatility of BTC w.r.t. USD is an important thing to consider and discuss when talking about its use as currency.
Of course. That's why at the moment I only use it for very long term savings and speculation on the future state of civilization.
You need to hold a bit of your local fiat because that's still the most important thing to have for immediate term purchases. Have enough of that and a fiat based income steam such that you don't have to worry about the short term fluctuations of the market price.
> an analog foundation defended by guns and tight cliques of trusted human gangs
Question: when one exchanges Bitcoin for a real-world good or service, what enforces the good or service be provided? And on the flip-side of that question: if one provides a good or service before Bitcoin payment clears, what guarantees payment?
Look to dark net markets for answers. They have to solve this problem in one of the most adversarial and dangerous environments possible, with zero legal recourses to mediate disputes.
The key thing they do is include a third party in the transaction, usually the market itself, who mediates disputes along with a reputation system for sellers. They mostly do it in a centralized way, where the market holds your payment until the buyer confirms or the seller can prove they held up their end. This is a problem because the market can and often does exit scam, so some do this in a decentralized way with 2 of 3 multisig transactions, where if the buyer and seller have no dispute, they can release the money, but if they do, a third party arbitrator can come in and mediate.
Also, higher layer payment protocols like the lightning network effectively clear instantly and trustlessly, with no need to wait for any block to be mined, and are great for minor value transactions.
Finally, replace bitcoin with gold in your question, and ask why that worked for thousands of years.
> replace bitcoin with gold in your question, and ask why that worked for thousands of years
Guns (well, swords and truncheons before that) and tight cliques of trusted human gangs, mostly. And I think I'd argue the dark net markets work the same way: holding reputation as currency, they provide an incentive for the users not to cheat, but if they cheat, there's no recourse except "Well, guess I'd better find another market." And that's if we discount the few but notable instances of them using actual violence to enforce their norms... Ulbricht of Silk Road got arrested for attempting to put an actual bounty on someone's head.
The blockchain system provides a simple way to very publicly and reliably declare the exchange of meaningful numbers between two pseudonymous identities. Everything else about the market that blockchain exists in is the same grabasstical process that humans have used for exchange of resources throughout all of history.
According to legendary quant Nassim Nicholas Taleb so called cryptocurrencies are so fundamentally volatile that they cannot be considered currencies: https://arxiv.org/abs/2106.14204
