In what scenario do you see bitcoins value not increasing compared to dollars as adoption increases?

Perhaps its based on a customers usage history. I know that whenever I've asked for higher limits they've granted them. Very brief research suggested a $5,000 limit, doesn't change what I see on my app right now and is either way irrelevant.

Lol at posing your question in such a biased way. So you want a refutation to dispute how increased adoption of bitcoin causes it to decline in value to USD? Seriously I'm getting so sick of the crowd this thread draws from bitcoin becoming so mainstream.

Please people at least use more than 1% of your brain when trying to take and learn objective viewpoints of alternate theories.

Did you even read the post I was responding to originally? HE was proposing the scenario where bitcoin reaches mass adoption, not me.

Please person take your giant head out of your ass for two seconds and learn how to read.

I make a point of protecting my privacy/anonymity when using bitcoin but I don't do anything illegal with it, and I'm pretty sure I'm not the only one. I think the "if you're not doing anything wrong then you shouldn't have anything to hide" argument is a bogus one. I do root for bitcoin to facilitate certain types of activities that are illegal in the US, though.

And I try to limit my reliance/usage of traditional banks and would switch off them entirely as soon as it becomes convenient. I think the banking system is built on morally and economically dubious ground and as a matter of fact checkings & savings accounts are poor in terms of preserving purchasing power long term. And I think the often touted FDIC program and the security it provides creates a moral hazard for banks and, along with the recent bank bailouts, merely socializes the risks and downfalls of banks.

I strongly disagree w/ Raine in this line of arguments but I agree with him on this point. Bitcoins don't come with any guarantee that they will gain value or that they'd increase in adoption.

Yes dollars are deliberately designed lose purchasing power over time (albeit slowly), whereas bitcoin has a finite supply, but that's far from a promise that bitcoin will increase in value proportional to the dollar over any period of time. I do think bitcoins are a favorite to increase in value against the USD in the long run, but I realize there's no guarantee and that there will be many short term swings.

In short I'd never try to sell someone on bitcoin by advertising that they'll gain value against the dollar, since that's not a sure thing and the opposite could easily happen especially over the short term. It's not really a "feature," if anything it's a potential side effect of its actual features. There are, on the other hand, other definitive and clear advantages that bitcoin has which I'd highlight to other people.

Even though it's the same, I'd look at it more like dollars losing value vs the bitcoin. It only makes theoretical sense that producing more of currency a against a constant number of currency b is going to lower the value of currency a vs currency b. How could it not?

I don't think gold or similar commodities apply here because their finite supply has not been exhausted yet. I don't know if we can even approach it the same way as they don't work as well as dollars as a currency, but bitcoins do.

Because the value of currency b isn't fixed. Empirically speaking this is obvious, a bitcoin will buy you fewer dollars than it did a week ago for example.

Looking at it a different way, you could say that the entire supply of dollars purchases a certain amount of goods and services, whereas the entire supply of bitcoins purchases a different amount.

(Goods and services all dollars in existence can buy) / (number of dollars in existence) = purchasing power of a single dollar

(Goods and services all bitcoins in existence can buy) / (number of bitcoins in existence) = purchasing power of a single bitcoin

If you tweak the denominators of either currency, the purchasing power changes. Increasing the dollar supply without increasing the bitcoin supply, all else equal, means a bitcoin gains purchasing power against a dollar. But you can also change the numerator, and in the case of bitcoin the (goods and services all bitcoins in existence can buy) is volatile and not guaranteed. It might get less volatile one day, perhaps on a level comparable to USD, but it will still never be guaranteed.

I am holding the "Goods and services we can buy" variable constant because it is based on many factors that are unrelated to this argument(such as the main country of that currency's economy at the time). It is true that if the GDP of the US jumps and the value of the dollar increases, that could offset the loss in value from printing more dollars, but we are looking at this from a theoretical perspective where we have no knowledge of whether or not GDP(or other variables that would affect purchasing power) is increasing or decreasing. However, we do know that all countries' currencies are increasing their money supply. The expected value of the currency increasing its supply will always be decreasing versus the finite supply.

Again, this statement is disproved by observable reality. There are countless examples of bitcoin losing value against the dollar, often times 10% or more in a day and for reasons that have nothing to do with money supply. Arguing whether or not the dollar always loses value compared to bitcoin is like arguing whether or not the sky is blue. My post was just attempting to explain why it's like this.

US and/or world GDP in real terms can skyrocket and bitcoin can still lose purchasing power if it happens to fall out of favor for whatever reason.

Expected Value does not always end up being the actual value. I realize that the actual value will constantly be changing and not always increasing, but we have no idea what the values for the variables that affect "Goods and services we can buy" will be at different points in time. We cannot assume that one of them will be more positive/negative than the other. But we do know that in the current system, new currency is constantly being produced. So the only thing we can change in your formula is the denominator and the numerator has to remain constant for this theoretical exercise.

It's almost like the "guaranteed up in value" people are not assuming any change in demand with time.

i had a td bank checking account in college that i forgot about after i left. like 3 years ago i get a call from a collections agency telling them that i owe like $186.32 or something.

obviously, i am like this is totally insane. call td, apparently they had changed their policy at some point to require a minimum balance. i had $100 or something in there at a time, so after 10 months of fines it's at zero and then starts getting negative. they claim they sent mail (to my college address!) but never even so much as gave me a phone call. it felt absurd, but i just paid the amount to make sure it didn't go on my credit history. was pretty pissed.

FWIW your original statement didn't say anything about "expected" value, but this is still nonsense. If you want to assume a completely theoretical and unrealistic scenario where the market caps of bitcoin and dollars don't change in real terms, then yes you are right, but you were presumably talking about reality when asking what scenarios might there be where bitcoin loses value against the dollar. Just because we can't predict with perfect accuracy whether the numerators in my example will go up or down, doesn't mean they will stay fixed. It can change, that's my whole point.

In the real world, a bitcoin's value/price is very volatile. It can easily lose against the dollar over even long time periods. Likewise, it can gain against the dollar in amounts vastly greater than the money supply growth rate of the dollar, like when it went up ~100x from 1/1/2013 to earlier this month.

The whole scenario put forth to me in the first place was a hypothetical one in the future where bitcoin is reaching mass adoption. It's not that we can't predict with "perfect accuracy" with the numerators.... we can't predict with any accuracy. I understand what you're saying and my original question of "What scenario would it lose value?" was not the right way to phrase it. My intention was to say that a finite supplied currency will always hold value better than one that is printed if we hold the other variables the same, and I don't see how we could do anything but that for a random point in time in this hypothetical future.

OK that I agree with. I just think its detrimental to bitcoin if people think of it as some sort of guarantee of profit or a get rich quick scheme, that contributes to the mania/panic cycles and detracts from its actual feautures.

How would this be detrimental to bitcoin?! What's the alternative scenario, that those people who believe that today didn't invest in bitcoin? How would that be any better?

Imo the belief some people hold that their fiat will be worth something in the future is really good for fiat...

For those purposes one uses a bank for.

Bankcoin would be traded on an exchange just like bitcoin, so inflation of the dollar would treat bankcoin just like it would bitcoin.

bankcoin wont succeed unless it was released 6 months ago.


People are catching onto the fact that banks and governments are intertwined and joined at the hip.

No one will trust that bankcoins wont be debased. As long as the deployment gap between cryptocurrency and bankcoin is measured in years, people will become more educated as to why btc + alt coins are vastly superior.

Man the statements some of you make, in such absolute terms... "no one will trust bank coins." blah blah blah. Nobody had a clue or trusted bitcoin a few years ago, including yourself (not including myself) so it's not a stretch that someone would trust a coin managed by JP Morgan Chase over a coin that "involves all sorts of fancy computing" and has no meaningful apps unlike the tremendously easy to use major banking apps. Not to mention people would definitely trust holding their bank coin in an FDIC insured bank account over a space on their HD or even offline which gets more complex. At least if someone hacks my BOA, BOA is there for me and replaces my coins. Coinbase and blockchain wallets and bitstamp accounts get hacked constantly and they don't do ****.

SecondMarket CEO: Wall Street Will Put 'Hundreds of Millions' Into Bitcoin

http://finance.yahoo.com/news/second...203000747.html

I was extremely deliberate with my choice of words. I did not make a gross generalization of sentiment but rather gave a specific example of why bankcoins cannot be trusted as a store of value or inert means of payment.

You on the other hand,

$12billion says otherwise. Ridiculous.

show

your

work.

The alternative I'd prefer is that they purchase bitcoin with realistic expectations and a decent understanding for how it works, how it is used, and what its advantages are compared to fiat. That's why I try to pitch it on those strengths rather than a way to get more dollars quick.