Cash is still king in the black market. Bitcoin has taken a small slice of it, esp. for money laundering and buying drugs online.
Put it this way: the black market does not rely on bitcoin in any substantive way. Bitcoin, however, depends on the black market for its existence.
So the black market has a combined value of $10 trillion, but bitcoin takes only a small, small slice of it because cash is just better. It's just that this small slice is bitcoin's bread and butter.
While there is a market for those txns the reality is that most adopters, and they recognize themselves as early ones, today, buy bitcoin as an inflation hedge. It's hard to argue against the theory either. People scream 'but the volatility!!' but for people who only six months ago have seen their bitcoin holdings over double in value, they are probably thinking 'sure. But that's a trade-off that seems to be meeting its use-case'
At what market size do people who have criticized it in the past as only for those things, admit that perhaps that categorization isn't reflected in actuality? 100 billion? 500 billion? One trillion? 10 trillion?
> While there is a market for those txns the reality is that most adopters, and they recognize themselves as early ones, today, buy bitcoin as an inflation hedge.
That's my point - bitcoin is most useful for those who wish to engage in illicit activity (this accounts for at least 10% of bitcoin's market size if not more [1][2][3]) and for those who have ideological reasons to support it.
Those who have ideological reasons to fear inflation and support bitcoin are primarily libertarians, who think of inflation as Satan incarnate and view it as worse than murder and only slightly better than outright theft. But that's hardly a consensus view. Beyond those two groups, bitcoin has no real use.
I'm not saying bitcoin is worthless, I'm saying that there's a natural peak to its valuation based on its limited use cases (see above). Maybe bitcoin will make significant inroads in developing countries, and maybe then those $100 billion+ valuations will become reality, but I doubt it.
>Bitcoin, however, depends on the black market for its existence.
Do you have anything to back up this assertion?
I'm going to contradict you here, and say that there is no reason to assume that.
Only idiots would use Bitcoin for black market purchases in the first place, there are better alternatives for the majority of purchases, and the biggest sources of black market are still happening with USD.
I'm not sure why it's even relevant since both currencies would function just fine if we magically removed all illicit activity.
Put it this way: the black market does not rely on bitcoin in any substantive way. Bitcoin, however, depends on the black market for its existence.
So the black market has a combined value of $10 trillion, but bitcoin takes only a small, small slice of it because cash is just better. It's just that this small slice is bitcoin's bread and butter.