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yeah. Why do people buy gold for their portfolios? for the same reason BTC will exist.

Nursie 9y ago
As a backup, so that if the shit hits the fan they have something that's held value and fascination for thousands of years?
- vasilipupkin 9y ago
  right. So why does it hold value when shit hits the fan? you can't eat it, you can't treat a disease with it. Will it hold value in the future? My point is, it's really just convention. So, the same logic applies to bitcoin.
  - Nursie 9y ago
    Bitcoin hardly has convention on its side at this point! It has (artificial) scarcity. I think you'd have to be very ... optimistic to view BTC as a long term hedge like gold right now.
    - vasilipupkin 9y ago
      right. It has less convention than gold and less valuation. Bitcoin market cap is what 50-70 billion?. What is the non-industrial fraction of gold's market cap? 1 trillion? so, if bitcoin permanently stays at 10% of gold's hedging value, it justifies a valuation of 100 billion. that's not counting at all usefulness of bitcoin for money transfers.
      - Nursie 9y ago
        Ugh, methinks you are deliberately missing my point. There is no reason to think bitcoin is a good long term hedge.
        vasilipupkin 9y ago
        there is no reason yet to think that. But my point is it could become that hedge. Because there is no fundamental reason for gold to be treated as that hedge. So, my point is, the fact that there is no fundamental reason to use bitcoin is not really a great argument against it. Because there is no fundamental reason to use gold and it is used anyway.
        Nursie 9y ago
        There's no fundamental reason, no, however it has proven desirable and valuable over thousands of years. By your logic anything could be a hedge in future. Which is strictly speaking true, but not very useful. You may wish to consider the ~25% drop we've seen in the last couple of weeks when deciding on how well bitcoin holds its value through the ages...
        vasilipupkin 9y ago
        gold is also volatile and has had 25% pullbacks. Plot gold over time and you'll see. Hedging is not about the volatility per se but about correlation with other investments. anything could not be a hedge. It needs to be liquid, transferable, international, etc. etc. bitcoin is on the way there. I am not saying it will supplant gold, I am saying it could. that probability is certainly not zero.
        Nursie 9y ago
        And I think you're looking at the world through bitcoin-tinted glasses there.
        vasilipupkin 9y ago
        I wish I had been 5 years ago
        Nursie 9y ago
  - alexasmyths 9y ago
    "My point is, it's really just convention. So, the same logic applies to bitcoin." Not quite ... Gold is a 5000 year old convention - across cultures, languages, geographies and epochs. BTC is a few years old, and nobody really cares about it that much. Yes - they are essentially 'conventions', but they're so different in that regard they are hardly comparable.
    - vasilipupkin 9y ago
      yes, these differences are reflected in the market caps. But just cause some convention is 5000 years old, it doesn't mean new convention cannot overtake it. Bitcoin is 7 years old and doesn't seem to be going away.
alexasmyths 9y ago
"For the same reason BTC will exist." Gold and BTC are not nearly the same thing.

As a backup, so that if the shit hits the fan they have something that's held value and fascination for thousands of years?

vasilipupkin 9y ago
right. So why does it hold value when shit hits the fan? you can't eat it, you can't treat a disease with it. Will it hold value in the future? My point is, it's really just convention. So, the same logic applies to bitcoin.
- Nursie 9y ago
  Bitcoin hardly has convention on its side at this point! It has (artificial) scarcity. I think you'd have to be very ... optimistic to view BTC as a long term hedge like gold right now.
  - vasilipupkin 9y ago
    right. It has less convention than gold and less valuation. Bitcoin market cap is what 50-70 billion?. What is the non-industrial fraction of gold's market cap? 1 trillion? so, if bitcoin permanently stays at 10% of gold's hedging value, it justifies a valuation of 100 billion. that's not counting at all usefulness of bitcoin for money transfers.
    - Nursie 9y ago
      Ugh, methinks you are deliberately missing my point. There is no reason to think bitcoin is a good long term hedge.
      - vasilipupkin 9y ago
        there is no reason yet to think that. But my point is it could become that hedge. Because there is no fundamental reason for gold to be treated as that hedge. So, my point is, the fact that there is no fundamental reason to use bitcoin is not really a great argument against it. Because there is no fundamental reason to use gold and it is used anyway.
        Nursie 9y ago
        There's no fundamental reason, no, however it has proven desirable and valuable over thousands of years. By your logic anything could be a hedge in future. Which is strictly speaking true, but not very useful. You may wish to consider the ~25% drop we've seen in the last couple of weeks when deciding on how well bitcoin holds its value through the ages...
        vasilipupkin 9y ago
        gold is also volatile and has had 25% pullbacks. Plot gold over time and you'll see. Hedging is not about the volatility per se but about correlation with other investments. anything could not be a hedge. It needs to be liquid, transferable, international, etc. etc. bitcoin is on the way there. I am not saying it will supplant gold, I am saying it could. that probability is certainly not zero.
        Nursie 9y ago
        And I think you're looking at the world through bitcoin-tinted glasses there.
        vasilipupkin 9y ago
        I wish I had been 5 years ago
        Nursie 9y ago
- alexasmyths 9y ago
  "My point is, it's really just convention. So, the same logic applies to bitcoin." Not quite ... Gold is a 5000 year old convention - across cultures, languages, geographies and epochs. BTC is a few years old, and nobody really cares about it that much. Yes - they are essentially 'conventions', but they're so different in that regard they are hardly comparable.
  - vasilipupkin 9y ago
    yes, these differences are reflected in the market caps. But just cause some convention is 5000 years old, it doesn't mean new convention cannot overtake it. Bitcoin is 7 years old and doesn't seem to be going away.

alexasmyths 9y ago

"For the same reason BTC will exist." Gold and BTC are not nearly the same thing.