That’s cool. The intrinsic value of a dollar bill is whatever anyone else says it is. I think its worth the rag paper that its printed on. My bitcoin is worth $48k to someone today.
That will change tomorrow. And that’s OK.
Forget about the tulip aspect of it—I doubt I would ever be able to convince you about that. But if you ever wired money from one place to another, you know that is a tiresome, expensive process.
The Day that Yellen was yammering about Bitcoin being inefficient I transferred some to an exchange. It cost $32—about the same as a wire transfer. It took 40 minutes to complete.
I sold it, and wired the dollars to my bank account. That took two days.
THAT is the value in the network. If you are moving large sums of money from NY to Hong Kong, or Riyadh, bitcoin will get it there quickly, cheaply, and securely. And there are not four intermediaries each taking a cut nor the NSA, Mossad, and GRU peeking into the transmission.
For international/commercial trade this is a significant game changer.
Just as you would never buy a cup of coffee with an ounce of Gold, Bitcoin is not ever going to be effective in a retail setting.
Don't make me laugh. For your bitcoin there are a ton of "intermediaries" (miners) that have to play a role in verifying the transaction on the blockchain. They ALL GET A CUT for doing that.
I can't remember the last time I used cash in a Dunkin Donuts to buy a cup of coffee. I simply go to the app, order my coffee, and go inside to pick it up. Totally touchless transaction and DD has no idea how I'm actually paying for it. All they do is extract the amount required from my pre-loaded balance in the app.
The base-layer Bitcoin network is for vault transfers. The second-layer Lightning network will serve as a payment mechanism.
The Lightning network is designed to be 100% backed BTC actually extant on the Bitcoin network because any BTC deposited on the second-layer cannot be transacted on the base-layer. Unlike fiat money, it does not counterfeit its underlying hard money.
Thus, one’s first-layer BTC wallet is analogous to a bank vault where one would store one’s fortune. The Lightning wallet is analogous to a coin purse that in earlier days would contain a few precious metal coins for spending money.
BTC has no analogue with fiat currency because it is inherently rare whereas fiat currency can be created without limit. Even though it is still accepted in exchange for various goods and services, fiat currency is rapidly depreciating against Bitcoin. Fiat currency always returns to its intrinsic value because governments cannot resist the demands to print more of it.
There is something larger in the whole conversation that is not being elaborated on. That is the world order as it is now (so far). The USA has been the center of the world order say since the end of WW1. The dollar and the whole world order that we enjoy (low interest rates, dollar durability, safe and secure investments, ect) depend on that order. Not just the United States. As a Canadian I benefit from the US world order. But I believe it is ending, and there will be either be a collapse of the world order, OR, a new one centered around China. That is frigging scary.