1. I believe BTC has a high chance of crashing down 50%+ and staying down for many years if not forever, so I guess that's what we're disagreeing about, because if we ageed that it won't crash that much then that would make it function as a store of value.
What would convince me that it won't crash? (A) Having a source of demand inflow that's not purely speculative, presumably from people using it as a medium of exchange. Something analogous to gold's use for industrial applications and jewelry. (B) Being more Lindy, which it slowly gets each year, especially if it can survive a major recession like we may be seeing now/soon. I would still feel like it's weirdly speculative but at least I'd think my chances of losing my money are lower per year.
2. Sure if we're thinking about "other people adopting the same strategy" then we're using a speculative model of price, which I think is a good model to try to apply. Problem is that I think it can suddenly shift by an order of magnitude if everyone thinks everyone else just lost confidence for whatever reason. This is why I'm buying deep OOM put options to try to profit in case of a big crash in $BITO and other related names.
3. I would simply give my grandchildren an Vanguard fund which auto-rebalances an allocation of index ETFs across international stocks, bonds, REITs, energy, gold, etc. It's a great invention that you can set and forget for 100 years with as much confidence as anyone has ever had about any similar challenge. I personally wouldn't include crypto in the mix.
Saylor's claim that "equities are risky" isn't true in the context of being say 30% of an auto-rebalanced portfolio. This strategy guarantees that your grandchildren will reap their fair share of their society's economic growth, which I believe is the same objective you're wanting out of BTC.
Now, if you're worried about nation/societal collapse, a scenario where it's hard to keep one's own property rights, and you don't trust custodial parties like Vanguard or your family themselves to figure out how to handle those situations, then sure - put some BTC on a USB drive, bury gold/jewels/guns in your backyard, etc. Spend 3% of your budget on prepper stuff like that.
4. Sure, BTC has things that make it attractive as a medium of exchange compared to gold and paper cash, but in practice I'd be surprised if the amount of transaction volume for purchases ever grows beyond a few $billion/yr because competent countries will only adopt a currency whose supply is in their control in order to prevent deflation spirals, and the demand level for the kind of money that's acceptable for taxes and debts will always be pretty high and hard to match for an outsider cryptocurrency.
5. Banking people with crypto only makes sense in the larger context where a bunch of transactions are doable in crypto, which is the reason why the scenario doesn't work IMO (that I don't see more than a few $billion/yr total transaction volume ever happening). Otherwise the real "banking" that's being provided to these people is their ability to exchange crypto for fiat, not their ability to accept fiat per se. And whatever institution has that fiat banking power might as well just bank them without the crypto part, no?
6. Yeah I'm afraid volatility is an issue because people are buying the asset for speculation in a way that they don't for a USD, so IMO there will always be major positive momentum feedback loops in both the up and down direction, i.e. it'll just always be a fun volatile casino.
7. I can imagine BTC's market cap hitting $9T at some point if people get really convinced about its ability to store their value, but then it'll probably crash again as soon as something spooks people, because there's no particularly guaranteed place for the crash to stop. The fact that people are hoping to store their value there doesn't mean they are all willing to keep buying more at that same value. The coordination problem doesn't have that kind of equilibrium as far as I can tell. Everyone just wants the best price for themselves.
With gold, I think it's important that there's a floor of I believe $2T or so purely for the consumable applications. That way you guarantee a certain base level of demand inflow that's not just based on what people think they can flip to others, and then the multiple or "currency premium" or whatever it is can fluctuate above that. But if BTC's currency premium is like 100x+ it becomes just pure speculation, not at all connected to any other stable pricing model.
8. If you just want to just maintain your savings and are willing to sacrifice lots of potential upside just to be really confident about say a 1% real return, it's easy to diversify and hedge the shit out of a portfolio. This is why no one is worried that university endowments are going to go down in real value IMO.
9. Today the quality and selection of cheap products available for purchase is sooo much better than when I was a kid in the 90s. I'm not an expert on the CPI, but it's not like we've experienced hyperinflation and the gov is hiding it.
If you think steady deflation across all sectors is possible, I think that's a crux of our disagreement. I think most economists think that's not a stable possible outcome, and deflationary spirals are bound to happen. I can imagine the economists being wrong, I don't have a super deep understanding here and I'm curious to understand it better. If they are wrong, it also means we should consider switching back to the gold standard, doesn't it.
All good questions thanks. As you can see I'm not an expert. Happy to have people improve and debate these answers.
