Bitcoin remains the best and most liquid savings vehicle over the last five years of its existence. Assuming savings = holding currency for over 1 year.
On 98% of the days that you could have purchased Bitcoin you would have realized an increase in purchasing power in a year's time. In those 2% of cases where you could have purchased Bitcoin and seen a loss over one year, you would have still seen an increase in purchasing power in another 300 days. (This is mostly dealing with the June 2011 bubble)
There has never been a time where you could hold Bitcoin for 2 years and lose purchasing power. On the contrary, holding Bitcoin brings on average a 5x per year return in purchasing power.
Past performance, future gains, blah blah. Judgement is about taking into consideration the facts we have now and comparing them against past performance. There are very good reasons why Bitcoin is valued around $6billion now and very good reasons to think it will be valued higher in the future.
You should be placing your life savings in Bitcoin, and only purchasing the USD that you require and holding it for as short of a period as possible. This would have been the best strategy for 98% of 1 year periods over the last five years, and 100% of 2 year periods over the last 5 years.
Debit cards that draw on Bitcoin balances and allow you to use the VISA and Mastercard networks should be the most interesting products -- because they allow you to expose yourself to the dollar's periodic collapse against Bitcoin for the shortest period of time.
I'm sure I'll be downvoted and that people will tell you that Bitcoin is super risky and that you should only invest what you can afford to lose -- but shouldn't that be the case for the dollar and not Bitcoin?
The dollar loses 90% of its purchasing power against Bitcoin on semi-regular schedules, and people keep purchasing more after each collapse. This routine should get old after a while, but that's what happens when you don't use Bitcoin as your unit of account!
You're using a time-span that's a full 20% of the item's lifespan. Anyone with a single college level statistics class wouldn't be able to keep a straight face reading this.
over the last five years of its existence
The first exchange didn't come online until summer of 2010.
What's the 1 year picture like for everyone who had coins in Mt. Gox?
I've been through college level statistics classes. Nothing I learned in them suggested that holding currency for less than a year was an appropriate measure of savings.
You're complaining that Bitcoin hasn't been around long enough to make a proper measure of its performance. Then you complain that people who gave control of their coins to Mt Gox didn't get their coins back.
I don't understand what these complaints have to do with the fact that Bitcoin has been a fantastic savings vehicle for five years running. (Or four if you prefer)
I don't deny its performance, and I'm actually quite bullish on it. I just think 365-665 days is a fairly arbitrary number, and a lifetime of 4-5 years is not enough to draw conclusions from.
Facepalm. I can pick 20 small cap stocks that have outperformed the dollar over the past year. That only makes them a good savings vehicle in hindsight.
Confusing short-term speculation with sustainable added value here.
Can you pick 20 small cap stocks which have outperformed the dollar over four years? Are there tens of thousands of merchants that will accept said stocks as payment for their products? Are there payroll systems and employees eager to accept these stocks as wages?
The fact that my post is even controversial is kind of silly if you think about it. All you're saying is, "Yeah, but!"
On 98% of the days that you could have purchased Bitcoin you would have realized an increase in purchasing power in a year's time. In those 2% of cases where you could have purchased Bitcoin and seen a loss over one year, you would have still seen an increase in purchasing power in another 300 days. (This is mostly dealing with the June 2011 bubble)
There has never been a time where you could hold Bitcoin for 2 years and lose purchasing power. On the contrary, holding Bitcoin brings on average a 5x per year return in purchasing power.
Past performance, future gains, blah blah. Judgement is about taking into consideration the facts we have now and comparing them against past performance. There are very good reasons why Bitcoin is valued around $6billion now and very good reasons to think it will be valued higher in the future.
You should be placing your life savings in Bitcoin, and only purchasing the USD that you require and holding it for as short of a period as possible. This would have been the best strategy for 98% of 1 year periods over the last five years, and 100% of 2 year periods over the last 5 years.
Debit cards that draw on Bitcoin balances and allow you to use the VISA and Mastercard networks should be the most interesting products -- because they allow you to expose yourself to the dollar's periodic collapse against Bitcoin for the shortest period of time.
I'm sure I'll be downvoted and that people will tell you that Bitcoin is super risky and that you should only invest what you can afford to lose -- but shouldn't that be the case for the dollar and not Bitcoin?
The dollar loses 90% of its purchasing power against Bitcoin on semi-regular schedules, and people keep purchasing more after each collapse. This routine should get old after a while, but that's what happens when you don't use Bitcoin as your unit of account!