[-] mrjack@lemmy.world 1 points 2 days ago

Payments of this nature using the layer 1 blockchain are not super feasible, as you say. (Although I've made several online purchases using BTC and it works quite well.) However, layer 2 solutions like the Lightning network do allow for extremely fast and cheap transactions, then they use the slower layer 1 blockchain for final settlement later.

Cryptocurrencies have three main attributes that affect their usability: Speed, Security and Costs. You can pick any 2 but there's always a tradeoff with the 3rd. For example, BTC chooses to prioritize security over everything else. This results in it being slower and sometimes more expensive than other crypto, but that extreme security is what makes it such a good store of value over the long term.

If you want faster and cheaper transactions, you can use other cryptos like Solana but the security and reliability is no comparison.

You're right, you may never use layer 1 for everyday transactions but there is nothing better when it comes to storing and transferring large amounts of value. So just sell a little BTC every now and then and convert it into whatever currency you need for everyday use, whether that be fiat or some faster, cheaper (but less secure) cryptocurrency.

[-] mrjack@lemmy.world 1 points 2 days ago

All good questions.

It can be both a currency and an investment. Money can be an investment, but not any fiat money that exists in the world today, thanks to inflation (money printing). Gold and silver can be both money and an investment, but even gold and silver have an inflation rate (new metal being mined and introduced into the market, aka market dilution.)

The reason this is a hard concept to grasp is because we are taking something that is truly finite (21 million bitcoins, EVER to exist) and we measure it against the USD which literally has no limit to the amount they can and will print. When you think of it this way, Bitcoin price relative to USD has no limit because USD money printing has no limit. There can always be more USD but never more BTC, therefore BTC's value when denominated in USD will theoretically go up forever (though not always at the same crazy rates we've seen the past 15 years.)

Take gold for example. In the 1960s it was $35/oz. Today it's over $3,000/oz. Is this because gold has somehow changed to become more valuable or did the USD just become less valuable while gold stayed the same?

1BTC will always be 1 of 21 million BTC. USD on the other hand will always be continually devalued due to money printing.

Nobody can tell you exactly how this is going to work out 20 or 50 years from now but the growing consensus is BTC price relative to fiat price can really only continue to go up because it's literally the the hardest form of money in the world - even more so than gold. It's the only asset in the universe that we can buy and hold and know exactly how much of it there is and ever will be.

I don't recommend anyone buy into something they don't understand but I will say I believe it would be well worth your time to study bitcoin and learn about what makes it different from fiat. Read books like Broken Money, The Bitcoin Standard and The Big Print.

[-] mrjack@lemmy.world 1 points 3 days ago

You have to think about Bitcoin in a different way from any other form of money that has ever existed because it's literally the first of its kind.

I work hard for money. I expend my time and energy and talent in exchange for money (USD, in my case) that I can then trade in the future for the things I want/need. So money is an abstraction of my time and engergy, stored for later use.

Unfortunately, USD is pretty highly inflationary and it loses a lot of value over time, so it doesn't make sense to save it for very long. I have to either spend it or invest it because every day I hold on to it, it loses a little more of its original purchasing power.

I could invest my money in gold or silver because those things are certainly more finite than USD and hold value better, but precious metals are heavy, difficult to transport and store in large quantities and I can't easily use gold to pay for my daily expenses.

So here's an idea: What if instead of converting my time, energy and talent into some physical thing that I have to hold onto and contend with inflation, etc. we just cryptographically assign that value to an entry on the public blockchain ledger? Now, that value is permanently locked into part of the total 21 million supply of bitcoin and no one can create more of it. Bitcoin is literally the hardest form of money ever created.

If I want to exchange that value with someone else in the future, I use my private cryptographic key to prove that I own it and I can effortlessly transfer it to anyone anywhere in the world in a matter of minutes.

You can't think of Bitcoin as some "thing" that you buy because a "bitcoin" is really nothing more than a unit of measurement. The real power of the bitcoin network is the ability to store and transmit value in a completely secure and trustless way that's immune to the manipulation of fiat currency.

If you're truly interested in understanding the answers to your question of "is bitcoin actually worth anything", I recommend the book Broken Money by Lyn Alden. It's an easy read and it will absolutely change how you see money.

mrjack

joined 3 days ago