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Bitcoin-Explain to me how to buy these things (1 Viewer)

The transaction fee on my last btc transaction of approximately $3600 USD was $0.05 and transaction was confirmed multiple times within 20 mins.

Using a bitcoin atm is equivalent to taking gold to a pawn shop.  You're paying a premium for convenience.

Bitcoin also works the other way, as the inability to "charge back" saves the sportsbooks boatloads.  Very easy to get a 25-50% bonus on your account for using Bitcoin to deposit.

 
culdeus said:
What stops people from making a new coin?  How's Kodakcoin going?
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I only know and understand Bitcoin.  I shouldn't have made my current statement so broad.

Currently there are just over 18 million bitcoins in existence.  Approximately 86% of the total amount ever and currently being produced and awarded at about 1800 a day.

ETA: bitcoins are "awarded" for processing transactions (mining).

 
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Walking Boot said:
I'm rounding, but there are fees on both ends in and out. If you had a $20 bill in your wallet, and you wanted to send it to me, you'd load the $20 into a btc wallet, losing about 5-8% on the transaction depending on the method you use (ACH, Bitcoin ATM, etc). Then you'd transfer it to my wallet and lose maybe another 5%, then I'd want to cash it out and lose the 5-8% again in that transaction. I'd end up with maybe $16.

No one accepts those kind of fees when using credit cards, usually, people get 1-2% cash back from Visa.
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Your numbers seem to have been made up.

https://ibb.co/mC1pFQt

Cost 6 cents to securely transfer $3600 in less than 20 minutes.

 
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Also, at this stage btc ATMs are for novelty and criminal purposes only.  They are happy to pay the fee to buy and withdraw if it means staying off the financial grid.  They are not intended for investors or speculators. Hth.

 
Walking Boot said:
If you want to ignore them point, that's fine. I don't expect the fan boys to accept reality. 
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Like the reality where Bitcoin helped me retire at the age of 32?

You win, bro, I'll quit typing and go back to counting my money.

Your point is invalid and your numbers are made up, not "rounded".  Your argument sucks.

 
Bitcoin is simply incomparable to "visa".  

The benefits of Bitcoin are not focused on micro transactions of $20 or less.  It is simply not very convenient or efficient to be dealing with microfraction amounts and waiting 20 minutes for it to be confirmed.  Bitcoin was not intended to replace credit cards.

But say you have an antique or something valued at say $20k and you are approached by a complete stranger.  What would you possibly rather accept as payment besides Bitcoin?

You gonna sit down and watermark an entire bag of cash in front of the guy?

Accept PayPal?  They side for the buyer 4/5 times, if you are dealing with a person and not one of the 10s of thousands of hacked accounts.

Take a credit card? U.S. credit card fraud is a $10 billion annual industry. The whole point of block chain is to make fraud is near impossible

And what about a good ole check?  More than 1 million worthless checks are written daily.

Not to to mention the currency transaction reports that have to be filed with the feds for anything over 10k.

If I'm receiving funds from someone over $2500, I'd almost demand it in bitcoin.  As soon as the transaction is verified I am 100% certain the payment is in my possession with no risk of chargeback.

In the local Bitcoin days strangers used to meet in a fast foot resteraunt and conduct 10,000s of cash for Bitcoin transactions.

 
hooter311 said:
Bitcoin is simply incomparable to "visa".  

The benefits of Bitcoin are not focused on micro transactions of $20 or less.  It is simply not very convenient or efficient to be dealing with microfraction amounts and waiting 20 minutes for it to be confirmed.  Bitcoin was not intended to replace credit cards.

But say you have an antique or something valued at say $20k and you are approached by a complete stranger.  What would you possibly rather accept as payment besides Bitcoin?

You gonna sit down and watermark an entire bag of cash in front of the guy?

Accept PayPal?  They side for the buyer 4/5 times, if you are dealing with a person and not one of the 10s of thousands of hacked accounts.

Take a credit card? U.S. credit card fraud is a $10 billion annual industry. The whole point of block chain is to make fraud is near impossible

And what about a good ole check?  More than 1 million worthless checks are written daily.

Not to to mention the currency transaction reports that have to be filed with the feds for anything over 10k.

If I'm receiving funds from someone over $2500, I'd almost demand it in bitcoin.  As soon as the transaction is verified I am 100% certain the payment is in my possession with no risk of chargeback.

In the local Bitcoin days strangers used to meet in a fast foot resteraunt and conduct 10,000s of cash for Bitcoin transactions.
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Credit cards aren't used commonly for large transactions due to transactions fees, credit limits and other factors.  If there is any issue of lack of trust between the parties, cashier's checks or wires are common.  I can see the potential value of blockchain technology for that.  

However, why would I want to store my money in there?  If almost all my transactions are being done  by regular means in dollars, for uncommon large transactions I'd rather just get money in and out as soon as possible.

As a side  note, there are advantages to our society for all the protections given to consumers in the current banking system such as dispute rights with credit card transactions.  Also, I'm glad currency transaction reports (among other banking requirements) are being filed to help law enforcement combat money laundering and other illegal activities.  You don't mention these positives in your post above.

 
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Juxtatarot said:
Also, I'm glad currency transactions reports (among other requirements) are being filed to help law enforcement combat money laundering and other illegal activities.  You don't mention these positives in your post above.
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I for one think this is a huge overreach by government and one of the big reasons why I am interested in crypto in the first place. 

Not sure if you have ever had the misfortune of trying to pull ~$5k or more of your own money out of your bank(I did to purchase a car from an older private party that was willing to give me a big discount for cash at the time) but it's a miserable experience. First, and best of all, the bank tells you that they don't actually have that much cash and will have to make a cash order. If you are lucky like I was they had just made their cash order so they honestly told me it would take a full week before their next cash order would come in. Yes, it took me 7 days to get $5k of my own money out of my bank. Then I got a follow up phone call(which wasn't a huge deal) so I could take the time to explain why I was withdrawing that much of MY OWN MONEY!? WTF? 

If the authorities are using this as a way to catch drug dealers in the $5k range I think it's asinine. Even $50k drug dealers/gun runners/etc would be idiotic. 

 
BoltBacker said:
I for one think this is a huge overreach by government and one of the big reasons why I am interested in crypto in the first place. 

Not sure if you have ever had the misfortune of trying to pull ~$5k or more of your own money out of your bank(I did to purchase a car from an older private party that was willing to give me a big discount for cash at the time) but it's a miserable experience. First, and best of all, the bank tells you that they don't actually have that much cash and will have to make a cash order. If you are lucky like I was they had just made their cash order so they honestly told me it would take a full week before their next cash order would come in. Yes, it took me 7 days to get $5k of my own money out of my bank. Then I got a follow up phone call(which wasn't a huge deal) so I could take the time to explain why I was withdrawing that much of MY OWN MONEY!? WTF? 

If the authorities are using this as a way to catch drug dealers in the $5k range I think it's asinine. Even $50k drug dealers/gun runners/etc would be idiotic. 
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I work in banking and am familiar with the potential hassles of large cash withdrawals.  However, what you experienced has to do with the bank's internal policies and procedures, not government "overreach".  Regardless, though, using cash for a large dollar transaction can be a pain.  No doubt about that.

 
I didn't realize BTC transactions took 20 minutes to settle.  That would be annoying.  I sell my car to someone, he initiates things on his end, and I now have to hang out with him for 20 minutes waiting for the transaction to go through before giving him title and keys?  

 
So, paying cash for a car and $20k antiques are perfect for bitcoin. I don’t think most times it’s 7 days and a hassle as I’ve sold two cars for more than $5k in cash and both times the buyers brought cash next day. Heck a third time I took a credit union certified check with no issue. Those two cases and people are calling for the market cap to be as big as the total USD market? That’s what the $1 million per bitcoin people are saying. 

 
Isn't zelle basically an irreversible large money transaction setup based around block chain?  Why not use it?

 
culdeus said:
Isn't zelle basically an irreversible large money transaction setup based around block chain?  Why not use it?
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You might be thinking of something else.

There are limits on the dollar amount and frequency of transactions allowed on Zelle that are imposed by the banking institution associated with the account being used.[20] For example, transfers from a Wells Fargo funding account are limited to $2,500 per day and $4,000 in a 30-day period, and lower limits apply when using the Zelle mobile app rather than the bank's self-operated services.[20][21] Transfers from a Chase checking account are limited to $2,000 per day and $16,000 per calendar month.[20][22]
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https://en.m.wikipedia.org/wiki/Zelle_(payment_service)

Zelle transactions can also be disputed through the banking system.

 
Juxtatarot said:
I work in banking and am familiar with the potential hassles of large cash withdrawals.  However, what you experienced has to do with the bank's internal policies and procedures, not government "overreach".  Regardless, though, using cash for a large dollar transaction can be a pain.  No doubt about that.
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I 100% believe you, but my bank repeated over and over that any withdrawal over <X amount> and they were required by law to report it. They could have been lying, I don't put it past them. A friend told me the magic number was closer to $2,000 but the bank told me it was exactly the amount I was trying to withdraw(which admittedly was more than that).

Not trying to play the FBG card here, but I'm not sure that $2k(or even $5k) is all that large a cash withdrawal in 2019. 

 
BoltBacker said:
I 100% believe you, but my bank repeated over and over that any withdrawal over <X amount> and they were required by law to report it. They could have been lying, I don't put it past them. A friend told me the magic number was closer to $2,000 but the bank told me it was exactly the amount I was trying to withdraw(which admittedly was more than that).

Not trying to play the FBG card here, but I'm not sure that $2k(or even $5k) is all that large a cash withdrawal in 2019. 
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Yeah a few years ago I stopped in on a random weekday to withdraw like $3K and they had to run around and make sure they could cover it

 
Walking Boot said:
Chase has 5000 branches in the US. If each just had $5000 in cash bills lying around on hand just in case some random customer decided to drop in and withdraw, they'd need $25,000,000 in just physical bills. And then so would US Bank, BofA, and so on.

I don't think that's reasonable to expect. 
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Chase is worth $2,700,000,000 so if they had $25,000,000 in cash in all it's branches that would be less than 1% of what they are worth.

What is a percentage that YOU think would be reasonable? 0.1%? 0.00001%?

 
BoltBacker said:
Chase is worth $2,700,000,000 so if they had $25,000,000 in cash in all it's branches that would be less than 1% of what they are worth.

What is a percentage that YOU think would be reasonable? 0.1%? 0.00001%?
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Market cap and deposits are different things.  There are rules on float set out by the FDIC and federal reserve.  

 
Walking Boot said:
Chase has 5000 branches in the US. If each just had $5000 in cash bills lying around on hand just in case some random customer decided to drop in and withdraw, they'd need $25,000,000 in just physical bills. And then so would US Bank, BofA, and so on.

I don't think that's reasonable to expect. 
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I'm certainly not taking any sides here in regards to your crypto debate--but in my opinion--any legit bank in the USA should have far more than $5k in cash lying around in case of withdrawals.   People that bank with an institution do so with the impression that if they need access to some of their funds in an immediate fashion that it should be available to them.   If a bank couldn't handle three people coming in on  a single day to withdraw $2k each--that's really bad.   If I knew that I banked with a company where withdrawing a few thousand dollars could be a problem--I'd want to cut ties with them immediately.  

 
Walking Boot said:
I don't see this as a problem that bitcoin solves best. If you're willing to use bitcoin for a large transaction, why not a cashiers check, electronic transfer, or other digital exchange? What about bitcoin makes it better than any of the many other non-cash options? 
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We've gone over the same topics this entire thread but once again....

How many fake, stolen, or forged checks are attempted to be passed every day?

How about credit card or PayPal charge backs.

Before btc, these are some real world examples that happened to me personally:

In college I rented a room to a guy who claimed to not have a bank account and would give me a personal check made out from his brother  to him for rent and he would sign the check over to me to cash.  His brother was always around so I never questioned it, I knew their parents died in an accident a few years prior and the checks were from a trust account I figured his brother was the custodian.  This went on for about 18 months.  Then one day I went to us bank to withdraw my tuition for the semester and not only was my $3500 not there to withdraw, but I was overdrawn for another $6000.  Turns out the story was 90% true but he had stolen a checkbook from his brother and everything I had cashed for him had been charged back.  I was able to get him to turn himself in and sign a confession. I won a court judgement against him for around 6k.  I figured when he got out of jail he went back in for something else.  Long story short, it's been over 15 years and in that time I've received one restitution check in the amount of $18.50.

Another example a few years after that was when a reputable online sports book used to issue withdrawal requests via international checks. Multiple deposits of those checks were deposited over about a 3 month period.  Every single one had been charged back due to some "banking error". Took another 3 months of fighting the book and finally they agreed to send it Western Union.  Sure, it worked and I got my cash but apparently receiving a large sum from a third world country will get you banned for life.

A third example is my family business.  We raise rodeo bucking bulls and buy all over north America.   When dealing with Mexican citizens, the language and culture barrier makes it extremely difficult to negotiate. So many things can get lost in translation or not communicated.   Business would usually be done over the phone and then we would haul bulls to the Texas border for them take through customs.  Seems like we would be foolish to take a check or any kind, can't really wait for a wire transfer at 2am while we are unloading, and I'm definitely not taking a paper bag with 10s if thousands of cash.  Bitcoin has been a lifesaver in that situation.

Coinbase plays by us banking rules and any laundering attempted through there is extremely easy to identify and monitor.  Not to mention they share all data with the IRS.  I've been taxed on every gain and I was happy to pay it.

Bitcoin removes all risk from getting money from one place to another. No risk of chargebacks.

I also don't get why exchanging Bitcoin for cash is necessary unless you need the cash. Btc was around $17 when I became aware of it.  Some of those $17 coins were among the ones I exchanged for 19k each when it peaked.

I basically grew up on this board.  If you want to take the time to dig, it's all documented here.

 
BoltBacker said:
I 100% believe you, but my bank repeated over and over that any withdrawal over <X amount> and they were required by law to report it. They could have been lying, I don't put it past them. A friend told me the magic number was closer to $2,000 but the bank told me it was exactly the amount I was trying to withdraw(which admittedly was more than that).

Not trying to play the FBG card here, but I'm not sure that $2k(or even $5k) is all that large a cash withdrawal in 2019. 
Click to expand...
$10K in currency is the amount.  You can be reported for lesser amounts , but it wouldn’t be routine.  

Note that bank employees don’t always understand what is law and what is bank policy and often don’t explain things to customers accurately.

Banks often have cash withdrawal maximum policies for many reasons which I could go in more depth about if you want it.  I can safety state though that branches almost always have many thousands extra.

Most people rarely need a lot of cash for legitimate reasons. Making a large private party purchase could be one.  Foreign adoptions used to be another but I don’t know if that’s still the case.

 
hooter311 said:
We've gone over the same topics this entire thread but once again....

How many fake, stolen, or forged checks are attempted to be passed every day?

How about credit card or PayPal charge backs.

Before btc, these are some real world examples that happened to me personally:

In college I rented a room to a guy who claimed to not have a bank account and would give me a personal check made out from his brother  to him for rent and he would sign the check over to me to cash.  His brother was always around so I never questioned it, I knew their parents died in an accident a few years prior and the checks were from a trust account I figured his brother was the custodian.  This went on for about 18 months.  Then one day I went to us bank to withdraw my tuition for the semester and not only was my $3500 not there to withdraw, but I was overdrawn for another $6000.  Turns out the story was 90% true but he had stolen a checkbook from his brother and everything I had cashed for him had been charged back.  I was able to get him to turn himself in and sign a confession. I won a court judgement against him for around 6k.  I figured when he got out of jail he went back in for something else.  Long story short, it's been over 15 years and in that time I've received one restitution check in the amount of $18.50.

Another example a few years after that was when a reputable online sports book used to issue withdrawal requests via international checks. Multiple deposits of those checks were deposited over about a 3 month period.  Every single one had been charged back due to some "banking error". Took another 3 months of fighting the book and finally they agreed to send it Western Union.  Sure, it worked and I got my cash but apparently receiving a large sum from a third world country will get you banned for life.

A third example is my family business.  We raise rodeo bucking bulls and buy all over north America.   When dealing with Mexican citizens, the language and culture barrier makes it extremely difficult to negotiate. So many things can get lost in translation or not communicated.   Business would usually be done over the phone and then we would haul bulls to the Texas border for them take through customs.  Seems like we would be foolish to take a check or any kind, can't really wait for a wire transfer at 2am while we are unloading, and I'm definitely not taking a paper bag with 10s if thousands of cash.  Bitcoin has been a lifesaver in that situation.

Coinbase plays by us banking rules and any laundering attempted through there is extremely easy to identify and monitor.  Not to mention they share all data with the IRS.  I've been taxed on every gain and I was happy to pay it.

Bitcoin removes all risk from getting money from one place to another. No risk of chargebacks.

I also don't get why exchanging Bitcoin for cash is necessary unless you need the cash. Btc was around $17 when I became aware of it.  Some of those $17 coins were among the ones I exchanged for 19k each when it peaked.

I basically grew up on this board.  If you want to take the time to dig, it's all documented here.
Click to expand...
As has been said a billion times.  The technology is great.  That doesn't mean it has to have a volatile value. If you want this tech to succeed you would want it to stay as stable as the dollar pound euro type exchange.  

 
hooter311 said:
I also don't get why exchanging Bitcoin for cash is necessary unless you need the cash. Btc was around $17 when I became aware of it.  Some of those $17 coins were among the ones I exchanged for 19k each when it peaked.
Click to expand...
But why should someone assume the risk of bitcoin price volatility? Most people in America get paid in US dollars and almost never have need to make monetary transactions in something other than dollars.

 
Down to 6,000....why is this thing taking a beating?  I thought this was the go to when the markets went to crap?

 
eoMMan said:
Down to 6,000....why is this thing taking a beating?  I thought this was the go to when the markets went to crap?
Click to expand...
I posted this in the stock forum—but gold and silver are also dropping in a fairly big way today (which is strange because they are normally safe havens). I think that between margin calls—and a rush to liquidity—when people can’t sell what they want to sell—they are forced to sell what they can sell.  

 
Anyone stacking sats during quarantine?  I think the next 2-3 years will see new ATHs somewhere north of $100k.  Anyone overly bearish or bullish on the future of bitcoin?  How many non-believers still out there? How many believers have given up?  I'm still hodling strong!

 
Rhythmdoctor said:
Anyone stacking sats during quarantine?  I think the next 2-3 years will see new ATHs somewhere north of $100k.  Anyone overly bearish or bullish on the future of bitcoin?  How many non-believers still out there? How many believers have given up?  I'm still hodling strong!
Click to expand...
Bump 

 
Rhythmdoctor said:
Bump 
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Looking at a chart - I think Ethereum  and Bitcoin are close to a new bull trend with an expectation of 20%+ gain over the next few months.  I'd like to see the trend confirm and a slight pullback on ETH/USD to around $180.  Bitcoin is a little behind (imo)...so maybe tailing ETHUSD by a couple of days.  Ideally a buy with a confirmed trend change at around $7350 or so.

Think Cryptocurrency has a future...not sure how or how far but something I pay attention to.

 
siffoin said:
Looking at a chart - I think Ethereum  and Bitcoin are close to a new bull trend with an expectation of 20%+ gain over the next few months.  I'd like to see the trend confirm and a slight pullback on ETH/USD to around $180.  Bitcoin is a little behind (imo)...so maybe tailing ETHUSD by a couple of days.  Ideally a buy with a confirmed trend change at around $7350 or so.

Think Cryptocurrency has a future...not sure how or how far but something I pay attention to.
Click to expand...
Thanks for chiming in. Are you familiar with the stock-to-flow model? Interesting analysis. The latest version predicts the next hype cycle at $288k for bitcoin sometime by 2024. 

Here’s the latest update on it with revised analysis from the original model. 

https://medium.com/@100trillionUSD/bitcoin-stock-to-flow-cross-asset-model-50d260feed12

 
For those that may want to DCA into BTC, the Cash App recently added an autobuy feature. Fees is a little higher than Coinbase's auto buy but still a nice way to set and forget. 

 
It’s crazy to me how many people still haven’t bought at least SOME bitcoin. It’s been the best performing asset for the last decade and it’s not even close! I presume many think you must need to purchase a full bitcoin which obviously is not true. For instance you can by roughly 13,000 Satoshis right now for $1. Someday Satoshis will be the equivalent to $1. 

 
A Satoshi is equal to 0.00000001 bitcoin. Put another way, one bitcoin contains 100 million Satoshis.  

So for a Satoshi to be worth a $1 a bitcoin would need to be worth $100M  - I really hope that happens and soon, but that does not seem particularly realistic. 

 
Angry Beavers said:
A Satoshi is equal to 0.00000001 bitcoin. Put another way, one bitcoin contains 100 million Satoshis.  

So for a Satoshi to be worth a $1 a bitcoin would need to be worth $100M  - I really hope that happens and soon, but that does not seem particularly realistic. 
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I think in 20+ years it will be but I’m also a huge believer in bitcoin and about as anti bank as one can be. Bitcoin is financial freedom. 

 
Rhythmdoctor said:
I think in 20+ years it will be but I’m also a huge believer in bitcoin and about as anti bank as one can be. Bitcoin is financial freedom. 
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I don’t want to rain on your parade but when all of the discussion is about Bitcoin as an investment, that’s the reason why I don’t believe in it at all. It’s so far from being something anyone actually uses and that’s what the original point of it was.

Also, if Bitcoin is worth $10M per bitcoin it would be worth more than the total market cap of all the gold in the world and the S&P 500. That’s a lot for something that’s comparatively never used.

 
stbugs said:
I don’t want to rain on your parade but when all of the discussion is about Bitcoin as an investment, that’s the reason why I don’t believe in it at all. It’s so far from being something anyone actually uses and that’s what the original point of it was.

Also, if Bitcoin is worth $10M per bitcoin it would be worth more than the total market cap of all the gold in the world and the S&P 500. That’s a lot for something that’s comparatively never used.
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This is a common argument against bitcoin but it's not accurate. There's a great article titled: The Bullish Case for Bitcoin.  It's a long read but well worth it if you're at all interested in Bitcoin.  In the article the author explains how money has 4 stages in its evolution. I have taken that excerpt and pasted it below.  When you understand the evolution of money you begin to see the potential for Bitcoin which has been the best performing asset of the last decade despite people continually claiming it is going to zero.

The Evolution of Money

There is an obsession in modern monetary economics with the medium of exchange role of money. In the 20th century, states have monopolized the issuance of money and continually undermined its use as a store of value, creating a false belief that money is primarily defined as a medium of exchange. Many have criticized Bitcoin as being an unsuitable money because its price has been too volatile to be suitable as a medium of exchange. This puts the cart before the horse, however. Money has always evolved in stages, with the store of value role preceding the medium of exchange role. One of the fathers of marginalist economics, William Stanley Jevons, explained that:

Historically speaking … gold seems to have served, firstly, as a commodity valuable for ornamental purposes; secondly, as stored wealth; thirdly, as a medium of exchange; and, lastly, as a measure of value.

Using modern terminology, money always evolves in the following four stages:

1. Collectible: In the very first stage of its evolution, money will be demanded solely based on its peculiar properties, usually becoming a whimsy of its possessor. Shells, beads and gold were all collectibles before later transitioning to the more familiar roles of money.

2. Store of value: Once it is demanded by enough people for its peculiarities, money will be recognized as a means of keeping and storing value over time. As a good becomes more widely recognized as a suitable store of value, its purchasing power will rise as more people demand it for this purpose. The purchasing power of a store of value will eventually plateau when it is widely held and the influx of new people desiring it as a store of value dwindles.

3. Medium of exchange: When money is fully established as a store of value, its purchasing power will stabilize. Having stabilized in purchasing power, the opportunity cost of using money to complete trades will diminish to a level where it is suitable for use as a medium of exchange. In the earliest days of Bitcoin, many people did not appreciate the huge opportunity cost of using bitcoins as a medium of exchange, rather than as an incipient store of value. The famous story of a man trading 10,000 bitcoins (worth approximately $94 million at the time of this article’s writing) for two pizzas illustrates this confusion.

4. Unit of account: When money is widely used as a medium of exchange, goods will be priced in terms of it. I.e., the exchange ratio against money will be available for most goods. It is a common misconception that bitcoin prices are available for many goods today. For example, while a cup of coffee might be available for purchase using bitcoins, the price listed is not a true bitcoin price; rather it is the dollar price desired by the merchant translated into bitcoin terms at the current USD/BTC market exchange rate. If the price of bitcoin were to drop in dollar terms, the number of bitcoins requested by the merchant would increase commensurately. Only when merchants are willing to accept bitcoins for payment without regard to the bitcoin exchange rate against fiat currencies can we truly think of Bitcoin as having become a unit of account.

Monetary goods that are not yet a unit of account may be thought of as being “partly monetized”. Today gold fills such a role, being a store of value but having been stripped of its medium of exchange and unit of account roles by government intervention. It is also possible that one good fills the medium of exchange role of money while another good fills the other roles. This is typically true in countries with dysfunctional states, such as Argentina or Zimbabwe. In his book Digital Gold, Nathaniel Popper writes:

In America, the dollar seamlessly serves the three functions of money: providing a medium of exchange, a unit for measuring the cost of goods, and an asset where value can be stored. In Argentina, on the other hand, while the peso was used as a medium of exchange—for daily purchases—no one used it as a store of value. Keeping savings in the peso was equivalent to throwing away money. So people exchanged any pesos they wanted to save for dollars, which kept their value better than the peso. Because the peso was so volatile, people usually remembered prices in dollars, which provided a more reliable unit of measure over time.

Bitcoin is currently transitioning from the first stage of monetization to the second stage. It will likely be several years before Bitcoin transitions from being an incipient store of value to being a true medium of exchange, and the path it takes to get there is still fraught with risk and uncertainty. It is striking to note that the same transition took many centuries for gold. No one alive has seen the real-time monetization of a good (as is taking place with Bitcoin), so there is precious little experience regarding the path this monetization will take.
Click to expand...

 
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