RE: WIN 500 SP - DISCUSSION: "Should Bitcoin Just Be a Currency or Store of Value?"

First of all, I would like to remind everybody the circumstance of bitcoins birth. Bitcoin was born right after the 2008 financial crisis, that brought global economies to their knee. People lost houses, businesses, financial assets, and much more. Businesses went bankrupt, stock market collapsed. Crisis was compared to the great depression of 1929 that lasted for quite a while.

Main cause of the crisis was the financial and banking systems. Central banks can create money at will and fractional reserve system allows banks to gamble with 90% of the money deposited. Brilliant minds already had cryptocurrency proposals even before bitcoins creation. There were multiple alternatives before bitcoin. It was the right timing and elegance of Satoshi Nakomoto’s bitcoin whitepaper that finally made it possible.

Store of value is in bitcoins DNA, that’s why we call it digital gold. It encompases all best features that gold offers and gets rid of problems that gold as store of value has. Compared to gold, bitcoin supply is predictable. You can’t all of the sudden find large gold mine that can drastically drop prices. Supply increase is fixed and limited in bitcoin and most importantly supply is predictable. Bitcoin improves traditional gold with ease of transfer and transportation. Finally, it cannot be easily taken away from the holder of the bitcoin.

For these reasons bitcoin will remain as store of value. Going back to the reason bitcoin came about, it has to serve as an alternative to the current fiat currency. Bitcoin has been a currency for quite a while now. Crypto exchanges use bitcoin as reserve currency, more and more businesses are accepting bitcoin for various transactions, public has become more aware of bitcoin. Mainstream public, even if they don’t understand the blockchain technology, their understanding of bitcoin is a digital currency.

That brings us to present. Ironically, brilliant alternative to the modern financial system that was born as a result of financial crisis is having a crisis of its own. We are living in the most important month of bitcoin’s life. Miners, users and Jihan Wu are playing with bitcoins destiny with their ideaological wars. We will have to see how Segwit2x, UASF BIP148, and Jihan’s hard fork will play out. Will bitcoin be able to keep its status quo? will it split up into multiple coins? Nobody really know the answer to these questions, everybody is sticking to their idealogical believes and it doesn’t seem they are bluffing.

In my opinion, it would be best if everybody let go of their idealogical differences and kept bitcoin unchanged the way it is. That way bitcoin would remain dominant store of value and a reserve currency. Any issues stakeholders might have regarding the tx fees, scaling, etc would be none-issue if another crypto was designated as everyday use currency.

I don’t think fees miners get too high compared to the current financial systems we have, I don’t think transaction time is unreasonable, still beats the bank transfers. The only problem is when you would use it as an everyday currency. I don’t think waiting 10 or so minutes is reasonable for everyday currency transaction. But many experiments have been done, we have so many different alternatives now. Another crypto, that can provide speed in transactions can take over that function. In this regard, I wouldn’t want to see bitcoin as a currency.

As @thecryptofiend mentioned:

Any kind of failure or perceived failure in bitcoin has a massive effect on the perception and progress of cryptocurrencies in general.

That will put in danger crypto-technology's intent of being an alternative solution for the world financial systems' problems. That is why I believe that would have effect beyond cryptocurrency world. We will have to see where the internal bitcoin community wars will take us this August. I can just hope bitcoin will remain as one and unspilt entity.

In conclusion, for the reasons I have provided, I think bitcoin should keep the role of reserve currency and let other, more efficient cryptos take the role of everyday transactions currencies. As far as bitcoin as a store of value, it is its DNA and it should remain as such. Risk of changes to its DNA via hard or soft forks can undermine bitcoin’s future as dominant store of value crypto-asset.

Thank you for this discussion. I think it is right timing for this kind of discussion. Although most of us won’t have a say in what will happen, everybody who has stakes should take necessary preparations to protect their assets.