Anybody with even a modicum of math and economics skills saw this coming.
From FT interview with Coinbase CEO:
Bitcoin mining is a zero-sum game. As more people add capacity, it gets harder for everybody else. Margins compress, and the floor is your energy cost. [ . . . ]
You have hardware vendors running their own mining operations because customers aren’t buying as much equipment. The global hashrate keeps growing, which means everyone else’s margins keep shrinking.
Bitcoin was designed with the idea that transaction fees would eventually replace the subsidy, but that hasn’t happened. If Bitcoin doesn’t grow at 50 per cent or more annually, the math gets very tough after 2028 — and even tougher in 2032. Our strategy is to be in the lowest quartile in terms of production cost, because in a tight market, 75 per cent of the other guys have to shut down before we do.
My uncle is always falling for get rich quick schemes. He told my dad last fall that his investments were way up because he was buying crypto on margin smh
Every time I’ve thought bitcoin was dead, it has rebounded even higher. Maybe it still has another run left? Since it’s price is all based on speculation, nothing would surprise me.
I saw some guy commenting about how bitcoin was developed and sold as a currency for the masses to get away from fiat currency and would be used for buying and selling. How there were initially bitcoin ATM’s and some merchants actually accepted it. Now virtually no one uses it to buy anything as it is now used like gold as an investment.
I heard the counterargument recently, from a financial advisor type who was vacationing in a developing region. He was out having coffee at a local place one morning, and watched two guys at a nearby table conduct a mortgage transaction in bitcoin.
Your example is true of developed nations, and rich people in general. But the thing that really makes it look like bitcoin might actually stick around is that in developing regions where the local currencies are even more unstable than bitcoin, it is an actual transaction-based currency serving its fundamental purpose.
That being said…from a volume perspective MUCH more of it is indeed being used as a store of value, without question, so it’s still an interesting debate.