The Daily Paul has been archived. Please see the continuation of the Daily Paul at Popular

Thank you for a great ride, and for 8 years of support!

Comment: Bitcoin, for your information....

(See in situ)

Bitcoin, for your information....

at this moment is not quite a currency. You can't buy all that much with it and it's not all that fungible. It's difficult to convert into USD and it takes a LONG TIME. However there are a growing list of things people will sell for bitcoin.

At this time, most of the "momentum" is in bitcoin as an INVESTMENT VEHICLE. In other words, most people want to buy them and hoard them and not spend them. That is the biggest barrier bitcoin faces right now but also a great defense as it grows: large selloffs of bitcoin to date haven't really impacted it's perceived value OR PURCHASING POWER for long. In other words, so far it's agnostic to what would normally be an "inflationary input".

In that sense, bitcoin to an extent is BEHAVING LIKE A COMMODITY.

HOWEVER, the fact that it's not is apparent from it's wild fluctuations which are tied to no earthly physical events. It's agnostic to earthly physical events like tornados, tsunamis, drought, etc.

Do not be fooled by people talking about it "inflating" or "deflating", that is a mis-application of both terms. It's not a currency. It's something that promises to be one. The real thing to look at is it's PURCHASING POWER. That is the end-of-the-road metric. Ditto for "price discovery". Look at "purchase discovery".

Therefore it's a hedge to certain portfolios perhaps, especially a PM heavy one. But it's HIGH RISK. Way, way way high risk all the way from it's core code to you sitting at your computer in your very own home. And you can't just sit on it, you have to maintain security precautions as threats constantly evolve.

To summarize, bitcoin at present is kind of a morphing of commodity, a durable investment vehicle and a currency.

Now if you didn't understand any of the above, my advice to you is such:


Most of those who think so actually don't and most people who think sew actually rip.