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I would somehow think that an entity that has no intrinsic value, but only speculative value is quite bad store of value? (Of course, you are more than welcome

I would somehow think that an entity that has no intrinsic value, but only speculative value is quite bad store of value? (Of course, you are more than welcome to correct my hypothesis by indicating what is the intrinsic value bitcoin has. I thought that illegal trade was one of the major ones, but the parent told me that even that is there no more.)

homero 9y ago
That's true if that's what people believe. But Bitcoin is transforming into a store of value vs a currency right now and if more people begin believing that then it's true. It's like that for gold, except gold is losing that with millennials.
- beefield 9y ago
  Now, a good store of value to me means that the value is stable. And yes, also gold is really bad store of value by that measure. https://commons.wikimedia.org/wiki/File:Gold_price_in_USD.png https://commons.wikimedia.org/wiki/File:Gold_price_in_USD.pn...
kypro 9y ago
If you want an asset to maintain it's current value, then its demand and supply must also maintain their values. People talk about Bitcoin as "digital gold", but in reality it's not even close, and no crypto ever will be. Gold is valuable because there is a fixed natural supply, and throughout human history, across many civilisations and societies, gold has always been worth something - unlike our fiat currencies who's supply can be altered and made valueless. The problem with Bitcoin isn't it's supply, it's that it's value relies on it's demand remaining high (or at least maintaining current levels). Problem is there is no historic reason or intrinsic value to bitcoin to assume it will continue to have steady demand like gold. More worryingly in my opinion is that bitcoin's current demand isn't really for bitcoin at all. The demand is to make USD fast. The moment people realise Bitcoin might not give them returns similar to other safe investments, it will crash like all other bubbles do. I'm not saying people who get in early won't make loads of money, plenty of people made money from the dotcom bubble too, but you need to be smart about it and understand the risk. At $6,500 bitcoin's market cap is far beyond PayPal's which provides a genuinely useful service and processes millions of dollars of transactions every day.
- tlrobinson 9y ago
  Out of curiosity, what percentage of the world's gold is used for anything other than a store of value (which, arguably, much jewelry is as well)
  - ywain 9y ago
    According to Wikipedia: > The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry.
  - padobson 9y ago
    Gold is also one of the more conductive metals - that's another use that would provide a floor to its value. If the the momentum from using it as a store of value ever slowed and the price dropped, there would be a myriad of uses for it in electronics and medicine.

homero 9y ago

That's true if that's what people believe. But Bitcoin is transforming into a store of value vs a currency right now and if more people begin believing that then it's true. It's like that for gold, except gold is losing that with millennials.

beefield 9y ago
Now, a good store of value to me means that the value is stable. And yes, also gold is really bad store of value by that measure. https://commons.wikimedia.org/wiki/File:Gold_price_in_USD.png https://commons.wikimedia.org/wiki/File:Gold_price_in_USD.pn...

kypro 9y ago

If you want an asset to maintain it's current value, then its demand and supply must also maintain their values. People talk about Bitcoin as "digital gold", but in reality it's not even close, and no crypto ever will be. Gold is valuable because there is a fixed natural supply, and throughout human history, across many civilisations and societies, gold has always been worth something - unlike our fiat currencies who's supply can be altered and made valueless. The problem with Bitcoin isn't it's supply, it's that it's value relies on it's demand remaining high (or at least maintaining current levels). Problem is there is no historic reason or intrinsic value to bitcoin to assume it will continue to have steady demand like gold. More worryingly in my opinion is that bitcoin's current demand isn't really for bitcoin at all. The demand is to make USD fast. The moment people realise Bitcoin might not give them returns similar to other safe investments, it will crash like all other bubbles do. I'm not saying people who get in early won't make loads of money, plenty of people made money from the dotcom bubble too, but you need to be smart about it and understand the risk. At $6,500 bitcoin's market cap is far beyond PayPal's which provides a genuinely useful service and processes millions of dollars of transactions every day.

tlrobinson 9y ago
Out of curiosity, what percentage of the world's gold is used for anything other than a store of value (which, arguably, much jewelry is as well)
- ywain 9y ago
  According to Wikipedia: > The world consumption of new gold produced is about 50% in jewelry, 40% in investments, and 10% in industry.
- padobson 9y ago
  Gold is also one of the more conductive metals - that's another use that would provide a floor to its value. If the the momentum from using it as a store of value ever slowed and the price dropped, there would be a myriad of uses for it in electronics and medicine.