"Meaningless. (If you didn't detect them, how did you know they were counterfeit?)"
The bank detected them.
"But as long as we're being anecdotal, I pay Cash for pretty much everything, and I get about $1500 in pocket Cash a month from a Bank that is scrupulous about these things. In over three decades, I've never come across a counterfeit bill. Now it is just possible that I don't travel in circles where such bills would be passed; but I understand that there is no honor among thieves."
Given that your cash is coming from the bank where it is almost certain to be authentic, or someone giving you change out of a drawer where you almost certainly respend it without knowing if it is real or not the better question is how would you know they were or weren't counterfeit? Generally retail store deposits and other business deposits of large amounts of cash are what get the most scrutiny and it costs them outright the face value of the bill. But the bigger issue is the counterfeit cash that you don't detect which jacks up inflation making dollars in your pocket and your bank not spend as well as they should. That's why the vast majority of US currency overseas is counterfeit. Now you can believe the official inflation calculations giving tiny values and ignore that everything but staples tracked for those indexes has increased in cost by a hell of a lot more than that but either way your salary is going to worth less tomorrow than today because of a flood of fake cash.
"Paper Hanging is a Criminal act, and Banks can lack a sense of humor in these matters. What is your recourse in a Bitcoin scam? Go to the Cops and claim you were cheated in a Drug Deal by somebody you really trusted?"
And there is your bias screaming and robbing you of credibility. What is your recourse when written a bad check? Go to the Cops and claim you were cheated in a Drug Deal by somebody you really trusted?
That cash in your pocket is just as likely or unlikely to be used to purchase drugs as bitcoin. If you are scammed in a real estate investment scheme or by an exchange your recourse is just the same as if you'd used cash. Fraud doesn't suddenly become legal because bitcoin was the currency anymore than it would be if you'd used gold. Also, banks have nothing to do with paper hanging unless you've somehow conned a bank into cashing a fake check so it really has no relevance what sense of humor they have. The only thing having been written a check gets you is that if you can socially swing it without being a jerk you can eventually turn it in to the prosecutor who will attempt to collect the check and send the person to a class on handling finances if they fail. Get real, you can sell the debt for collection, take advantage of collateral, and utilize the small claims/civil courts the same as any other payment method.
"All that hashing to find a special result is a waste of energy."
That hashing isn't to find a special result, it's to validate transactions. "Cash is immediate." 80% outside the country of origin is also fake, all that "wasteful hashing " means there is no fake bitcoin... anywhere. Plastic cards also are not processed in seconds, those transactions can be reversed up to 90 days later that is a hell of a lot longer than it takes to fully process bitcoin.
Hell, I once worked a holiday season at a Michael's craft store and we had a couple hundred in counterfeit bills slip through a week even with UV checking and starch pens. There are no counterfeit bitcoins.
The system does however allow you to open yourself up to more risk of fakes in exchange for faster transaction times though. This could make sense in a number of circumstances. For instance those plastic transactions that can generally be reversed with no more than a statement up to 90 days after the fact. The merchant is calculating they make more offering the convenient and fast payment option than they lose to reversed transactions. Peer-to-peer transactions are often between people who know each other and/or who have recourse. Anyone you'd trust to write you a check can send you bitcoin with a tap that will get sync'd and validated with the network next time they go online. Even waiting one validation showing a random third party saw it in the blockchain is more assurance than you have that a wad of cash is real and seriously who is ever not connected anymore?
"Is bitcoin secure because those involved in the administration of it are honest?"
Bitcoin is secure because administration of it is completely decentralized so that nobody has to trust anyone. The entire thing is set up so that any point you are depending on the consensus of lots of random third parties who have no way to know what they are giving an opinion on, no way to influence what comes their way, and nothing to gain from the outcome. At every point it uses insane and impossibly large numbers rather than tricks or secrets and assumes everyone is greedy. How do you get lots of people to volunteer to verify transactions they can't cook for personal gain? Call it mining and give them the new chunks of bitcoin plus the transaction fees. Solid strategies with mathematical proofs, a total lack of trust, and no assumption but a general tendency toward self-interest. That is the bitcoin way.
The other thing it does is shift a lot of the burden of "security" onto the users. Bitcoin makes sure that you can trust the bitcoin I just gave you is real, I actually had it in my pocket, and that I can't somehow take it back afterward. It entirely shifts the burden to you to care or not care about whether I got it clubbing seals or helping old ladies cross the street and to me to make sure I'm not buying the Brooklyn bridge. I tend to agree with the makers of Bitcoin, it isn't that those things are important but they aren't the responsibility of the dollars in your wallet.
Just because it is a cryptocurrency, doesn't make it proven like bitcoin is proven. All sorts of third party scams have been running using bitcoin from the fed raid of silk road to mt gox but the bitcoin system itself has proven solid despite being the tool and target of every hacker around the globe and no other cryptocurrency even comes close to having passed that pressure test. Your tether, ether, dodgecoin, pokemon-emo-coin whatevers might be digital currency with cool and snazzy sounding ideas but they are barely even on the radar yet and many of them have been riddled with serious flaws. Interest in them and their value could disappear overnight. It is reasonable safe to say that no matter what happens, bitcoin is unlikely to go anywhere soon even if it ends up eventually being used as a reserve currency for some next gen winner that handles microtransactions more efficiently bitcoin will still hold value.
That clusterfuck is exactly the way things are supposed to be... so you can move to Oregon, Texas, or Deleware freely and pick the radically different legal environment the residents have selected in what should definitely not just be effectively a clone of every other state with almost entirely the same laws. That clusterfuck is supposed to make an entire swath of bullshit effectively unenforceable.
I'm sure. The Constitution explicitly gives the feds the right to regulate interstate commerce, it never stopped states from requiring you to disclose your interstate purchases on state income tax forms.
Yeah, I remember. It doesn't make much difference. Last time the net went down on my block for nearly four hours we were close to declaring a national state of emergency.
Verizon AKA MCI AKA Former AT&T has managed to be protected by telco regulation while avoiding any inconvenient telco regulation as a broadband provider for decades. This is just the next generation of the wet dream.
You are aware that pretty much without exception anything that the media and copyright cartels get in the US they subsequently get in Europe as well, right? The only difference is European politicians are cheaper.
Semi-auto handguns with 15-16 shots? What are you an anti-gun nut? These aren't exactly military grade weapons. I would have thought emulating a military rifle in Vegas would have highlighted the difference for everyone. Military SMALL arms are FULL AUTO (selectable of course). Semi-auto doesn't mean much of anything, 15-16 shots is really just needed with a handgun since they are completely inaccurate and generally useless unless you are within baseball bat range.
If you are going to talk about the police weapons I'd mention the shot guns, high powered rifles, grenades and tanks.
We need net neutrality but this is interstate commerce is one of the few things that actually is within the authority granted to the federal government. That's why you don't have to pay sales tax on online purchases and mail order. Just like that sales tax there is nothing giving them authority over transactions within the state even if they are of the same nature that potentially could cross state lines though...
We really really need to stop supporting twisting the law and watering down the Constitution when it means getting some policy we want. The ends do not justify the means. There hasn't been a single policy change seriously considered or implemented in this country that provides more benefits or prevents more harm OVERALL than the limitations on government power in the Constitution. Suffrage for women and abolishing slavery are the only things that come even remotely close.
Yes. Yes it is. People with shells, housed in solid structures, and who get the fuck out of the way when somebody is going to fly a giant steam powered rocket of their head are far more likely to survive and pass on the genetics that gave them these advantages. Granted, it's a small impact on the human race but we get double points since this guy gets taken out before he could have more offspring.
Noted. Since it isn't worth picking up that change off the ground put me down for the $286 mil/year in the US please. Even just one year would be cool with me. Thx.
"Being deflationary encourages people to buy in and hold with the intent of recouping that investment at a higher price. (This removes currency from circulation and further limits the size of the circulating economy.)"
"Given the daily fluctuations, nobody but an investor has any motive for holding BTC any longer than absolutely necessary."
Which is it?
"While Bitcoin does circulate - it's has precisely no underlying value. It's completely hypothetical."
No, Money has extreme innate utility and therefore value. The "value" you assign is arbitrary along with the value figure assigned to anything else but money is one of the most useful things we've ever invented and bitcoin has the two most important features a form of money needs. Everyone wants it and you can't magically discover more of it or fake it so it will always represent your score in the game of trade accurately relative to others. This isn't true of dollars or even gold, the innate properties of bitcoin make it more suitable for currency than either. While decentralization puts some responsibilities back on you it also means Bitcoin is even suitable for trade between nations that completely distrust each other and national banks.
Unlike gold, there isn't really a limit on how large an economy bitcoin can support due to being deflationary because there is no special significance in any decimal place. It really makes no difference if I buy candy bars with 1.0 BTC or.000001 BTC and you holding on to 200 BTC doesn't block me from buying the candy bar. In the real world people can't just sit on investments, needing/wanting things more than money is what drives people to spend.
"Myself, I suspect most bitcoin circulation is illusory... It's bought with a real currency, and promptly spent. The recipient then promptly redeems the BTC for real currency."
That isn't an illusion, that is circulation. That person who bought the BTC bought at the current price, they sell at the current price, they aren't someone who bought at a $1 and is sitting on $7499 in imaginary unrealized gains waiting for new investors. Surely at some point here you realize that it is illogical both to claim that deflation means nobody will do anything but sit on bitcoin forever and to claim that nobody sits on bitcoin and only uses it as a transaction currency? Which is the problem, that everybody is sitting on their bitcoin or that nobody is hanging on to their bitcoin? And if people hanging on to bitcoin doesn't prevent transactions, why is that a problem? If people rapidly transacting bitcoin brings market liquidity and limits the amount of unrealized investment profits how is that a problem?
Guessing where those numbers are or will be is the challenge. There is no guarantee when something is falling that it will stop falling. You only had 360EUR per unit invested, so all you were risking were profits, if you'd bought in at 4500 EUR you'd likely be a hell of a lot more concerned at 3500 EUR.
You are right, buy low and sell high is the most common investment tactic and frankly I've found it be the best advice of all and very practical. Properly executed it means going the opposite of the herd when research and logic say the herd is going the wrong direction. But you can still get burned, if you use margin you risk the herd going too far in the wrong direction before reversing course and without margin you risk your capital being tied up for too long waiting for the reversal. The general rule of thumb is 60/40 where 60% of people lose money, so clearly most people can not execute this most common investment tactic successfully.
"At the end of the day, the only thing that really distinguishes bitcoin from any of the other myriad cryptos is that it is the first and most well known."
The is a pretty big something. The entire system is designed so that the only fear remaining when you are completely educated and understand the math is some flaw you haven't thought of. Bitcoin has proven the test of the time with the hackers of the world trying to break it. While many organizations like exchanges have been robbed, nobody has managed to crack bitcoin's armor. The next hottest prospect is Etherium... Etherium has suffered from two major flaws costing hundreds of millions despite only being a couple years old.
There simply is no reason to USE these other coins. Nobody really accepts them outside an exchange, they are largely unproven and unheard of designs, and they don't really offer any kind of killer app functionality over bitcoin. They've done well for the same reason that intel does well when AMD or samsung chip fabs are doing amazing well... because some idiots invest in market segments instead of market players and if one player does extremely well it makes the segment appear to be doing extremely well and there is carryover. People will buy them instead of bitcoin because they go up when bitcoin goes up and because they are so cheap they act like leverage in a forex purchase, letting you multiply your gains and losses.
"I'd like some real, verifiable examples of how bitcoin is even useful in an ordinary person's every day life in one of those countries rather than "It's true because I say so"."
Because it is my job to do your research for you and gather the anecdotes of others? I've used bitcoin to buy 1/2 cord of firewood every year for the past four years, we drink hot tea and I've bought that tea with bitcoin for the past 5-6 years. I exchanged bitcoin for dollars to pay for my honeymoon, wedding, a new water heater, and a new air conditioner. I bought a number of things from overstock when they began accepting bitcoin. At the company I used to work for I convinced the company to invest in a miner and they used that miner's output to pay incentives to employees. Saved the company a boatload of money, some of the employees thought bitcoin was stupid at the time and would have preferred cash... they are pretty grateful now. At the same company we were locked in and often we'd order lunch in, it was far easier if one person paid and other's just paid them bitcoin became the typical way of doing this so nobody needed to worry about carrying around a bunch of cash.
Why? It isn't as if stocks are really directly tied to the company they are supposed to represent. At least not the stock people are generally trading and even dividends are becoming more and more rare. People just perceive the stock price and company performance as related, as such they use company performance as one excuse to justify their bets on the stock price... the only real connection that has to the stock price is that enough other people will probably do the same. But there are all sorts of other reasons.
AMD reported a great quarter blowing away already inflated expectations, they indicated they expect to bring in less next quarter but still more than last year, because a couple large investment firms with billions in unrealized losses on AMD they got everyone and their dog to report this like it was somehow bad news and the stock had dropped nearly 30% at one point... not because AMD reported bad news, they reported all good news, but because of spin. Similarly AMD has boomed alongside bitcoin booming, the analysts whose interests coincide with the same investment firms have tried to tell you why AMD's gpu sales won't benefit as much as intel from bitcoin mining, the other side tells you they will... the reality is that nobody has used GPU's to mine bitcoin for years because custom ASIC miners were developed that outperform GPU's by orders of magnitude. Any gpu sales increase AMD has had has been for other reasons entirely and all the stock movement either way based on these reports is completely bogus and unrelated to anything AMD is doing. So you see, while loosely influenced by company performance in reality the stock price is a purely speculative unit. If the stock price dropped to $0.01 tomorrow AMD wouldn't magically stop operations (unless they have credit tied to stock in some way perhaps) or suddenly have a bad 4th quarter, similarly if the stock price jumped to $100 they wouldn't magically have an amazing 4th quarter. The two are generally distinct.
"None of those things you mention claim to be currency (except foreign currency, which literally its only value is that other people use it as a currency and as such is the most risky of all your examples for investments)."
This simply isn't accurate, speculating on currency is what the entire credit and banking system is about. The value of currency is absolutely set on a speculative market just like a commodity or stock, the biggest speculative market of them all. Currency is one of the safest investments because that market is so massive that nobody can move it by much. The reason currency becomes a risky investment is because banks will often back highly leveraged investments (investing 10-50x as much as you actually have) since it is literally all secured with cash at some point and there are always people betting in the other direction.
But what many who think like the GP forget is that currency/money has intristic value as well. I don't have to figure out what you need and find someone who is willing to give it up in exchange for what I have to get what I need from you... because I can give you money for what I need and you can just buy what you need from whoever has it. That IS intrinsic utility and value, huge value. Bitcoin is ideal for serving the function of money because you can't counterfeit it and being deflationary you have confidence that if you accept it from me it will be worth even more later.
Copper can be used for all sorts of products. Money serves a practical function as well. Not needing you to want my blocks of copper in exchange for your ipod IS value and being able to hand you money instead of doing the footwork to figure out what you do want is definitely something of value aside from whatever specific rate we assign to the money.
Bitcoin is the ideal instrument for the purpose of providing the value and function money provides for us because it can't be counterfeited. Being deflationary the value only goes up so as confidence in the system grows people become more and more happy to accept it.
There are more than three reasons. The question begging here assumes the only legitimate usage of bitcoin is among criminals. This is patently false. There are nations with less than ideal currencies where bitcoin is commonly being used as exchange currency. Even a poor nation can support more currency than the total bitcoin economy and bitcoin is global. Bitcoin has a property that no other currency is proven to have (including alt cryptocurrencies) transactions are not reversible and bitcoin cannot be counterfeited.
"People are buying Bitcoin because they expect other people to buy it from them at a higher price; the definition of the greater fool theory."
False. Bitcoin circulates, it has underlying value, and it is deflationary. Every day bitcoin goes out of circulation as people lose access to wallets. I myself have lost access to at least 25 bitcoin over the years and nobody else has access either... that would be $187,500 at the $7500 per 1.0 btc I saw the other day. Bitcoin has had a number of bubbles and when those bubbles pop people panic and sell at a loss. When those buy in to the next bubble they buy at higher prices. This create a floor where people are generally invested at a higher price and their willingness to sell stops at a higher price. Also because bitcoin has been following that bubble, pop, bigger bubble cycle consistently since it's inception with first notable bubble being dollar parity the confidence in bitcoin is increasing over time, this too will slow the selloffs and when combined with the fact that genuinely new investors eventually slow to a trickle will mean smaller and smaller bubbles.
There is no absolute reason for any particular price on bitcoin to be a ceiling so long as the market is fluid. In fact the 1.0 BTC mark needs to grow quite a bit more for price stability so that there aren't investors who can notably move the market. I believe I calculated something like $10,000 per 1.0 BTC back when SR1 was operating. If there is too great a disparity between where most people bought and the current price those people will cash out when the growth appears to slow.
The recent bubble is largely because financial institution scale investors have begun investing. I don't know how safe it is to assume that can't continue to feed for quite awhile. Bitcoin is not open to the puny little wallstreet stock market type investor, it is open to global investment on a Forex level scale. It is not unreasonable at this point to think Bitcoin is only proven cryptocurrency or blockchain implementation at this point and will not go away in the forseeable future. That leaves room for a multi-trillion dollar market, not a few billion.
Slashdot Mirror
"Meaningless. (If you didn't detect them, how did you know they were counterfeit?)"
The bank detected them.
"But as long as we're being anecdotal, I pay Cash for pretty much everything, and I get about $1500 in pocket Cash a month from a Bank that is scrupulous about these things. In over three decades, I've never come across a counterfeit bill. Now it is just possible that I don't travel in circles where such bills would be passed; but I understand that there is no honor among thieves."
Given that your cash is coming from the bank where it is almost certain to be authentic, or someone giving you change out of a drawer where you almost certainly respend it without knowing if it is real or not the better question is how would you know they were or weren't counterfeit? Generally retail store deposits and other business deposits of large amounts of cash are what get the most scrutiny and it costs them outright the face value of the bill. But the bigger issue is the counterfeit cash that you don't detect which jacks up inflation making dollars in your pocket and your bank not spend as well as they should. That's why the vast majority of US currency overseas is counterfeit. Now you can believe the official inflation calculations giving tiny values and ignore that everything but staples tracked for those indexes has increased in cost by a hell of a lot more than that but either way your salary is going to worth less tomorrow than today because of a flood of fake cash.
"Paper Hanging is a Criminal act, and Banks can lack a sense of humor in these matters. What is your recourse in a Bitcoin scam? Go to the Cops and claim you were cheated in a Drug Deal by somebody you really trusted?"
And there is your bias screaming and robbing you of credibility. What is your recourse when written a bad check? Go to the Cops and claim you were cheated in a Drug Deal by somebody you really trusted?
That cash in your pocket is just as likely or unlikely to be used to purchase drugs as bitcoin. If you are scammed in a real estate investment scheme or by an exchange your recourse is just the same as if you'd used cash. Fraud doesn't suddenly become legal because bitcoin was the currency anymore than it would be if you'd used gold. Also, banks have nothing to do with paper hanging unless you've somehow conned a bank into cashing a fake check so it really has no relevance what sense of humor they have. The only thing having been written a check gets you is that if you can socially swing it without being a jerk you can eventually turn it in to the prosecutor who will attempt to collect the check and send the person to a class on handling finances if they fail. Get real, you can sell the debt for collection, take advantage of collateral, and utilize the small claims/civil courts the same as any other payment method.
80% of US cash outside the US is counterfeit and no small amount of it in the US is counterfeit.
"All that hashing to find a special result is a waste of energy."
That hashing isn't to find a special result, it's to validate transactions. "Cash is immediate." 80% outside the country of origin is also fake, all that "wasteful hashing " means there is no fake bitcoin... anywhere. Plastic cards also are not processed in seconds, those transactions can be reversed up to 90 days later that is a hell of a lot longer than it takes to fully process bitcoin.
Hell, I once worked a holiday season at a Michael's craft store and we had a couple hundred in counterfeit bills slip through a week even with UV checking and starch pens. There are no counterfeit bitcoins.
The system does however allow you to open yourself up to more risk of fakes in exchange for faster transaction times though. This could make sense in a number of circumstances. For instance those plastic transactions that can generally be reversed with no more than a statement up to 90 days after the fact. The merchant is calculating they make more offering the convenient and fast payment option than they lose to reversed transactions. Peer-to-peer transactions are often between people who know each other and/or who have recourse. Anyone you'd trust to write you a check can send you bitcoin with a tap that will get sync'd and validated with the network next time they go online. Even waiting one validation showing a random third party saw it in the blockchain is more assurance than you have that a wad of cash is real and seriously who is ever not connected anymore?
"Is bitcoin secure because those involved in the administration of it are honest?"
Bitcoin is secure because administration of it is completely decentralized so that nobody has to trust anyone. The entire thing is set up so that any point you are depending on the consensus of lots of random third parties who have no way to know what they are giving an opinion on, no way to influence what comes their way, and nothing to gain from the outcome. At every point it uses insane and impossibly large numbers rather than tricks or secrets and assumes everyone is greedy. How do you get lots of people to volunteer to verify transactions they can't cook for personal gain? Call it mining and give them the new chunks of bitcoin plus the transaction fees. Solid strategies with mathematical proofs, a total lack of trust, and no assumption but a general tendency toward self-interest. That is the bitcoin way.
The other thing it does is shift a lot of the burden of "security" onto the users. Bitcoin makes sure that you can trust the bitcoin I just gave you is real, I actually had it in my pocket, and that I can't somehow take it back afterward. It entirely shifts the burden to you to care or not care about whether I got it clubbing seals or helping old ladies cross the street and to me to make sure I'm not buying the Brooklyn bridge. I tend to agree with the makers of Bitcoin, it isn't that those things are important but they aren't the responsibility of the dollars in your wallet.
Just because it is a cryptocurrency, doesn't make it proven like bitcoin is proven. All sorts of third party scams have been running using bitcoin from the fed raid of silk road to mt gox but the bitcoin system itself has proven solid despite being the tool and target of every hacker around the globe and no other cryptocurrency even comes close to having passed that pressure test. Your tether, ether, dodgecoin, pokemon-emo-coin whatevers might be digital currency with cool and snazzy sounding ideas but they are barely even on the radar yet and many of them have been riddled with serious flaws. Interest in them and their value could disappear overnight. It is reasonable safe to say that no matter what happens, bitcoin is unlikely to go anywhere soon even if it ends up eventually being used as a reserve currency for some next gen winner that handles microtransactions more efficiently bitcoin will still hold value.
That clusterfuck is exactly the way things are supposed to be... so you can move to Oregon, Texas, or Deleware freely and pick the radically different legal environment the residents have selected in what should definitely not just be effectively a clone of every other state with almost entirely the same laws. That clusterfuck is supposed to make an entire swath of bullshit effectively unenforceable.
I'm sure. The Constitution explicitly gives the feds the right to regulate interstate commerce, it never stopped states from requiring you to disclose your interstate purchases on state income tax forms.
Nah, he's just a squirrel who works for them.
Yeah, I remember. It doesn't make much difference. Last time the net went down on my block for nearly four hours we were close to declaring a national state of emergency.
Verizon AKA MCI AKA Former AT&T has managed to be protected by telco regulation while avoiding any inconvenient telco regulation as a broadband provider for decades. This is just the next generation of the wet dream.
You are aware that pretty much without exception anything that the media and copyright cartels get in the US they subsequently get in Europe as well, right? The only difference is European politicians are cheaper.
Semi-auto handguns with 15-16 shots? What are you an anti-gun nut? These aren't exactly military grade weapons. I would have thought emulating a military rifle in Vegas would have highlighted the difference for everyone. Military SMALL arms are FULL AUTO (selectable of course). Semi-auto doesn't mean much of anything, 15-16 shots is really just needed with a handgun since they are completely inaccurate and generally useless unless you are within baseball bat range.
If you are going to talk about the police weapons I'd mention the shot guns, high powered rifles, grenades and tanks.
We need net neutrality but this is interstate commerce is one of the few things that actually is within the authority granted to the federal government. That's why you don't have to pay sales tax on online purchases and mail order. Just like that sales tax there is nothing giving them authority over transactions within the state even if they are of the same nature that potentially could cross state lines though...
We really really need to stop supporting twisting the law and watering down the Constitution when it means getting some policy we want. The ends do not justify the means. There hasn't been a single policy change seriously considered or implemented in this country that provides more benefits or prevents more harm OVERALL than the limitations on government power in the Constitution. Suffrage for women and abolishing slavery are the only things that come even remotely close.
Yes. Yes it is. People with shells, housed in solid structures, and who get the fuck out of the way when somebody is going to fly a giant steam powered rocket of their head are far more likely to survive and pass on the genetics that gave them these advantages. Granted, it's a small impact on the human race but we get double points since this guy gets taken out before he could have more offspring.
Why? *gets the popcorn*
Noted. Since it isn't worth picking up that change off the ground put me down for the $286 mil/year in the US please. Even just one year would be cool with me. Thx.
"Being deflationary encourages people to buy in and hold with the intent of recouping that investment at a higher price. (This removes currency from circulation and further limits the size of the circulating economy.)"
.000001 BTC and you holding on to 200 BTC doesn't block me from buying the candy bar. In the real world people can't just sit on investments, needing/wanting things more than money is what drives people to spend.
"Given the daily fluctuations, nobody but an investor has any motive for holding BTC any longer than absolutely necessary."
Which is it?
"While Bitcoin does circulate - it's has precisely no underlying value. It's completely hypothetical."
No, Money has extreme innate utility and therefore value. The "value" you assign is arbitrary along with the value figure assigned to anything else but money is one of the most useful things we've ever invented and bitcoin has the two most important features a form of money needs. Everyone wants it and you can't magically discover more of it or fake it so it will always represent your score in the game of trade accurately relative to others. This isn't true of dollars or even gold, the innate properties of bitcoin make it more suitable for currency than either. While decentralization puts some responsibilities back on you it also means Bitcoin is even suitable for trade between nations that completely distrust each other and national banks.
Unlike gold, there isn't really a limit on how large an economy bitcoin can support due to being deflationary because there is no special significance in any decimal place. It really makes no difference if I buy candy bars with 1.0 BTC or
"Myself, I suspect most bitcoin circulation is illusory... It's bought with a real currency, and promptly spent. The recipient then promptly redeems the BTC for real currency."
That isn't an illusion, that is circulation. That person who bought the BTC bought at the current price, they sell at the current price, they aren't someone who bought at a $1 and is sitting on $7499 in imaginary unrealized gains waiting for new investors. Surely at some point here you realize that it is illogical both to claim that deflation means nobody will do anything but sit on bitcoin forever and to claim that nobody sits on bitcoin and only uses it as a transaction currency? Which is the problem, that everybody is sitting on their bitcoin or that nobody is hanging on to their bitcoin? And if people hanging on to bitcoin doesn't prevent transactions, why is that a problem? If people rapidly transacting bitcoin brings market liquidity and limits the amount of unrealized investment profits how is that a problem?
Guessing where those numbers are or will be is the challenge. There is no guarantee when something is falling that it will stop falling. You only had 360EUR per unit invested, so all you were risking were profits, if you'd bought in at 4500 EUR you'd likely be a hell of a lot more concerned at 3500 EUR.
You are right, buy low and sell high is the most common investment tactic and frankly I've found it be the best advice of all and very practical. Properly executed it means going the opposite of the herd when research and logic say the herd is going the wrong direction. But you can still get burned, if you use margin you risk the herd going too far in the wrong direction before reversing course and without margin you risk your capital being tied up for too long waiting for the reversal. The general rule of thumb is 60/40 where 60% of people lose money, so clearly most people can not execute this most common investment tactic successfully.
"At the end of the day, the only thing that really distinguishes bitcoin from any of the other myriad cryptos is that it is the first and most well known."
The is a pretty big something. The entire system is designed so that the only fear remaining when you are completely educated and understand the math is some flaw you haven't thought of. Bitcoin has proven the test of the time with the hackers of the world trying to break it. While many organizations like exchanges have been robbed, nobody has managed to crack bitcoin's armor. The next hottest prospect is Etherium... Etherium has suffered from two major flaws costing hundreds of millions despite only being a couple years old.
There simply is no reason to USE these other coins. Nobody really accepts them outside an exchange, they are largely unproven and unheard of designs, and they don't really offer any kind of killer app functionality over bitcoin. They've done well for the same reason that intel does well when AMD or samsung chip fabs are doing amazing well... because some idiots invest in market segments instead of market players and if one player does extremely well it makes the segment appear to be doing extremely well and there is carryover. People will buy them instead of bitcoin because they go up when bitcoin goes up and because they are so cheap they act like leverage in a forex purchase, letting you multiply your gains and losses.
"I'd like some real, verifiable examples of how bitcoin is even useful in an ordinary person's every day life in one of those countries rather than "It's true because I say so"."
Because it is my job to do your research for you and gather the anecdotes of others? I've used bitcoin to buy 1/2 cord of firewood every year for the past four years, we drink hot tea and I've bought that tea with bitcoin for the past 5-6 years. I exchanged bitcoin for dollars to pay for my honeymoon, wedding, a new water heater, and a new air conditioner. I bought a number of things from overstock when they began accepting bitcoin. At the company I used to work for I convinced the company to invest in a miner and they used that miner's output to pay incentives to employees. Saved the company a boatload of money, some of the employees thought bitcoin was stupid at the time and would have preferred cash... they are pretty grateful now. At the same company we were locked in and often we'd order lunch in, it was far easier if one person paid and other's just paid them bitcoin became the typical way of doing this so nobody needed to worry about carrying around a bunch of cash.
https://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=8&cad=rja&uact=8&ved=0ahUKEwit3LrT27TXAhXmxlQKHWs4BqUQFghUMAc&url=http%3A%2F%2Ffortune.com%2F2015%2F07%2F10%2Fgreece-bitcoin-bitchain%2F&usg=AOvVaw3Gz_kkd9THKQBVWi4Mz2qI
Why? It isn't as if stocks are really directly tied to the company they are supposed to represent. At least not the stock people are generally trading and even dividends are becoming more and more rare. People just perceive the stock price and company performance as related, as such they use company performance as one excuse to justify their bets on the stock price... the only real connection that has to the stock price is that enough other people will probably do the same. But there are all sorts of other reasons.
AMD reported a great quarter blowing away already inflated expectations, they indicated they expect to bring in less next quarter but still more than last year, because a couple large investment firms with billions in unrealized losses on AMD they got everyone and their dog to report this like it was somehow bad news and the stock had dropped nearly 30% at one point... not because AMD reported bad news, they reported all good news, but because of spin. Similarly AMD has boomed alongside bitcoin booming, the analysts whose interests coincide with the same investment firms have tried to tell you why AMD's gpu sales won't benefit as much as intel from bitcoin mining, the other side tells you they will... the reality is that nobody has used GPU's to mine bitcoin for years because custom ASIC miners were developed that outperform GPU's by orders of magnitude. Any gpu sales increase AMD has had has been for other reasons entirely and all the stock movement either way based on these reports is completely bogus and unrelated to anything AMD is doing. So you see, while loosely influenced by company performance in reality the stock price is a purely speculative unit. If the stock price dropped to $0.01 tomorrow AMD wouldn't magically stop operations (unless they have credit tied to stock in some way perhaps) or suddenly have a bad 4th quarter, similarly if the stock price jumped to $100 they wouldn't magically have an amazing 4th quarter. The two are generally distinct.
"None of those things you mention claim to be currency (except foreign currency, which literally its only value is that other people use it as a currency and as such is the most risky of all your examples for investments)."
This simply isn't accurate, speculating on currency is what the entire credit and banking system is about. The value of currency is absolutely set on a speculative market just like a commodity or stock, the biggest speculative market of them all. Currency is one of the safest investments because that market is so massive that nobody can move it by much. The reason currency becomes a risky investment is because banks will often back highly leveraged investments (investing 10-50x as much as you actually have) since it is literally all secured with cash at some point and there are always people betting in the other direction.
Not to mention any fiat currency.
But what many who think like the GP forget is that currency/money has intristic value as well. I don't have to figure out what you need and find someone who is willing to give it up in exchange for what I have to get what I need from you... because I can give you money for what I need and you can just buy what you need from whoever has it. That IS intrinsic utility and value, huge value. Bitcoin is ideal for serving the function of money because you can't counterfeit it and being deflationary you have confidence that if you accept it from me it will be worth even more later.
Copper can be used for all sorts of products. Money serves a practical function as well. Not needing you to want my blocks of copper in exchange for your ipod IS value and being able to hand you money instead of doing the footwork to figure out what you do want is definitely something of value aside from whatever specific rate we assign to the money.
Bitcoin is the ideal instrument for the purpose of providing the value and function money provides for us because it can't be counterfeited. Being deflationary the value only goes up so as confidence in the system grows people become more and more happy to accept it.
There are more than three reasons. The question begging here assumes the only legitimate usage of bitcoin is among criminals. This is patently false. There are nations with less than ideal currencies where bitcoin is commonly being used as exchange currency. Even a poor nation can support more currency than the total bitcoin economy and bitcoin is global. Bitcoin has a property that no other currency is proven to have (including alt cryptocurrencies) transactions are not reversible and bitcoin cannot be counterfeited.
"People are buying Bitcoin because they expect other people to buy it from them at a higher price; the definition of the greater fool theory."
False. Bitcoin circulates, it has underlying value, and it is deflationary. Every day bitcoin goes out of circulation as people lose access to wallets. I myself have lost access to at least 25 bitcoin over the years and nobody else has access either... that would be $187,500 at the $7500 per 1.0 btc I saw the other day. Bitcoin has had a number of bubbles and when those bubbles pop people panic and sell at a loss. When those buy in to the next bubble they buy at higher prices. This create a floor where people are generally invested at a higher price and their willingness to sell stops at a higher price. Also because bitcoin has been following that bubble, pop, bigger bubble cycle consistently since it's inception with first notable bubble being dollar parity the confidence in bitcoin is increasing over time, this too will slow the selloffs and when combined with the fact that genuinely new investors eventually slow to a trickle will mean smaller and smaller bubbles.
There is no absolute reason for any particular price on bitcoin to be a ceiling so long as the market is fluid. In fact the 1.0 BTC mark needs to grow quite a bit more for price stability so that there aren't investors who can notably move the market. I believe I calculated something like $10,000 per 1.0 BTC back when SR1 was operating. If there is too great a disparity between where most people bought and the current price those people will cash out when the growth appears to slow.
The recent bubble is largely because financial institution scale investors have begun investing. I don't know how safe it is to assume that can't continue to feed for quite awhile. Bitcoin is not open to the puny little wallstreet stock market type investor, it is open to global investment on a Forex level scale. It is not unreasonable at this point to think Bitcoin is only proven cryptocurrency or blockchain implementation at this point and will not go away in the forseeable future. That leaves room for a multi-trillion dollar market, not a few billion.