alleged 'illusion of bitcoin liquidity'? Citation requested. [LWN.net]

alleged 'illusion of bitcoin liquidity'? Citation requested.

Posted Jan 13, 2018 21:01 UTC (Sat) by nix (subscriber, #2304)
In reply to: alleged 'illusion of bitcoin liquidity'? Citation requested. by Garak
Parent article: Welcome to 2018

For every problematic scenario you describe, there are 100X more ordinary successful transactions. This is why the market cap of the top ten cryptocurrencies is in the hundreds of billions of dollars.

That doesn't follow. As I've noted repeatedly, all the market cap indicates is that bitcoin is being mined, and that people are piling into it and pushing its exchange rate with the dollar up. It does not indicate that any actual transactions are happening (which would not affect the market cap, whatever the hell a "market cap" is supposed to be for a currency: that's a term you'd use for instruments being invested, which rather proves my point). Transactions for actual goods in a currency (as opposed to in and out of it) affect neither the amount outstanding nor its exchange rate.

I'm still in awe that it has already got years under its belt of having achieved it's initial design intent.

Insofar as the initial design intent included statements by its early adopters that it would allow effortless microtransactions, have transaction fees so low as to be imperceptible and certainly far lower than, say, Visa, and be a useful store of value, it has totally failed.

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