I find your argument is unpersuasive, because bitcoin value relative to commodities fluctuates wildly, making it useless as an exchange medium between my work and my compensation.
The purpose of money is to give me a way to work now for some purpose, and later to receive product or service that I need that is an appropriate value for the work I did.
Prior to money, we’d have to do this directly, which is inefficient. With money, if I want a TV set, I can clean your house even though you have no idea how to make a TV set; instead, you give me money, and then I can take it to a store and get a TV. I know how many hours I need to work cleaning people’s houses to get that TV. And while the dollar changes value, it is by such a small percentage of the price I am going to pay that I am much more concerned with the mentality of the company selling the TV, meaning that company might change the value they place on that TV relative to my work. But not relative to my dollar.
So, I decided to look at bitcoin price. And learned that you can’t even figure out what a bitcoin is actually worth.
Is it currently worth $580 dollars, or $620 dollars? What will it be worth in another hour? In another day?
I went to the bitcoin store to price a home theatre. I find this: Bitcoinstore $571.29
But they don’t sell a TV, just cheap home theater systems. Darn. I kept looking, but found a story about a bloomberg TV reporter having his bitcoin stolen:
“The guy that is hosting the series gave bitcoin gift certificates to the other two hosts. One of them opens up the certificate to reveal QR code of the private key,” he wrote. “They then proceeded to show a closeup of the QR code in glorious HD for about 10 seconds. Hilarious.”
I wonder if that is even a crime. After all, it isn’t real money that was stolen.
Then I found a link that said “Bought a TV with my bitcoin”. But it turns out they SOLD their bitcoin for CASH, and then used the CASH to buy the TV. I could do that with my old beanie-baby collection, but that doesn’t make beanie babies a currency:
“I cashed in some Bitcoin I had saved when I was mining them a couple of years ago. I took the money and bought a nice TV for my family. I went back and forth about buying one using BTC or just cashing some out and going traditional.”
But to be honest, someone commented that the guy didn’t have to cash out. Unfortunately, the commenter says he could go to the bitcoinstore, which as I noted doesn’t sell TVs.
“You do not have to go through the extra step of cashing out. There are online retailers that accept bitcoin as payment (like bitcoinstore.com) our you can purchase gift cards to use at local retailers (download the gyft app).”
Of course, a gift card is just a plastic card used for cashing out.
Then I find out that most places that sell you things in bitcoin have a no-return policy. Which makes sense, imagine offering a 30-day money-back guarantee, when your “money” could double or half in value.
I mean, so I spend 1 bitcoin on a nice TV, and then 3 weeks later I want to return the TV, but that bitcoin is only worth half of what it was before — I guess the company would be happy to take the return, and then sell the TV for 2 bitcoins. But if bitcoin doubled, then they won’t give me back one bitcoin for that TV.
Which is the problem. I work one day to earn enough to buy a nice dinner, I wait 2 weeks for my bitcoin paycheck but the bitcoin they give me is worth half, and then I wait for the weekend to take my wife to dinner and it drops another 20 percent.
That’s not money, I might as well get paid in company stock, except company stock won’t change price as much as bitcoin.
And so I go back to the bitcoinstore, and find this:
Bitcoinstore $568.92
Oops. I waited one hour, and all the prices at the bitcoinstore just went up by 3 bucks a bitcoin.
That is a 0.05%/hour inflation rate.
That is 1.35% per day inflation. That’s 3rd-world country inflation.
IN other words, in the past hour, bitcoin operated exactly like some 3rd-world-country “currency”. Which was the point of the article.
Then please address them specifically and I can try to help your understanding.
because bitcoin value relative to commodities fluctuates wildly, making it useless as an exchange medium between my work and my compensation.
I simply pointed out that the volatility in bitcoin is diminishing as adoption spreads (as one would expect), and that at the current rate that volatility is declining it will have volatility on par with the Euro in a few years time.
The purpose of money is to give me a way to work now for some purpose, and later to receive product or service that I need that is an appropriate value for the work I did.
No one disputes this. I'm not sure why you wrote it.
And while the dollar changes value, it is by such a small percentage of the price I am going to pay
How small that percentage is depends on the time that elapses. USD are being continually devalued. This is a process that will not stop. Bitcoins, as a hard currency, do not entail third party risk of a profligate government or poorly run central bank.
So, I decided to look at bitcoin price. And learned that you can’t even figure out what a bitcoin is actually worth.
Sure you can, there are many exchanges, and exchanges can even be conducted in person.
They are worth what everything is worth, and that is exactly what someone will pay for them at a given time.
Is it currently worth $580 dollars, or $620 dollars? What will it be worth in another hour? In another day?
I could sell my car in 2 minutes if I asked $100.
I could sell my car in 2 hours if I asked $10,000.
I could sell my car in 2 months if I asked $15,000.
What is my car worth? What someone will trade me for it, when I make the trade.
I went to the bitcoin store to price a home theatre. I find this: Bitcoinstore $571.29 But they don’t sell a TV, just cheap home theater systems. Darn. I kept looking,
Bitcoinstore does sell TVs, I just typed television in the search box and it listed the TVs they sell.
found a story about a bloomberg TV reporter having his bitcoin stolen:
“The guy that is hosting the series gave bitcoin gift certificates to the other two hosts. One of them opens up the certificate to reveal QR code of the private key,” he wrote. “They then proceeded to show a closeup of the QR code in glorious HD for about 10 seconds. Hilarious.”
I wonder if that is even a crime. After all, it isn’t real money that was stolen.
Like you, the host was learning how bitcoin works. He showed both the public address and private key. The public address is the wallet ID that people can use so they know where the money is being sent. The private key is akin to your PIN for an ATM card. If you give people the account number and the PIN, you're giving them everything they need to get into your account. The person in this case who did so was someone that contacted the host and explained his error, and transferred the bitcoin back.
But to be honest, someone commented that the guy didn’t have to cash out. Unfortunately, the commenter says he could go to the bitcoinstore, which as I noted doesn’t sell TVs.
As I noted, and linked above, it does. I will suggest that if you're someone that finds the internet 'hard', bitcoin isn't for you.
Then I find out that most places that sell you things in bitcoin have a no-return policy.
This is the purpose of bitcoin - irreversible transactions, like cash. There is no third party like VISA, etc. on the watch for fraud, but adding literally billions of dollars to the costs of goods for the transactions they handle. Bitcoin allows peer to peer transactions.
If a company wanted to allow refunds that isn't a subject of the protocol, but a business decision by the seller.
Which is the problem. I work one day to earn enough to buy a nice dinner, I wait 2 weeks for my bitcoin paycheck but the bitcoin they give me is worth half, and then I wait for the weekend to take my wife to dinner and it drops another 20 percent.
If you're concerned by market volatility there are services like bitpay.com that can make daily deposits via ACH in your local currency on an exchange weighted basis. Your concern highlights the nature of fiat currencies that are consistently debased.