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The whole article in a single sentence: "However volatile they may be, the reason why gold and bitcoin are perceived as stores of value is simple: their money s
by thisisit 9y ago
The whole article in a single sentence:
"However volatile they may be, the reason why gold and bitcoin are perceived as stores of value is simple: their money supply doesn’t grow quickly and, in the case of bitcoin not at all, some day."
Ergo, bitcoin is like gold. Hence, should be valued as gold.
- paulgb 9y agoThen shouldn't every deflationary alt-coin also be valued like gold? You can see where this is going...
- thisisit 9y agoI know, that's why I highlighted the flawed logic therein. Sure, one can talk about bitcoin and blockchain as being revolutionary but every time someone with a finance degree writes something, they go by hype and not substance.
- icahnvalyou 9y agoShouldn't every resource be valued like gold? There's a limited supply of copper... You can see where this is going. Gold is a weirdly sticky anachronism of a wealth store that never made any sense in the first place.
- bluGill 9y agoGold make sense because girls like to wear gold on their fingers, in their ears... Copper is not useful for that purpose.
- digi_owl 9y agoGold has one good property, it does not rust. Thus making tokens out them meant said tokens would last generations, and withstand the rigors of international transport. As best i recall, gold and silver were rarely popular for domestic trade. There more common materials were used. They were instead used for international trade. In the end people have come to confuse the token, a way to do trade accounting without an accountant always present, with the metal it was made of.
- vintageseltzer 9y agoBy that logic, gold would have crashed long ago and been replaced by all the other alt-rare-metals out there. It has not. The network effect should not be underestimated. The world is filled with examples of inferior systems that exist simply because they have more momentum than others. Investors demand a “store of value” investment vehicle. Up until now, gold has led that role. Now Bitcoin will take over. Not because it is the best, but because it is first to market and has enough momentum and utility to replace it.
- paulgb 9y agoI remember when people used to pay real money for ICQ numbers, so the network effect argument doesn't really get me.
- bluGill 9y agoNo, gold has one advantage over bitcoin: in the worst case scenario (where you survive, though a couple religions let you take it with you) it is a physical thing that is somewhat pretty to wear as a ring on your finger. Bitcoin and the like are entirely based on the idea that somebody else will want them as currency forever. Gold is based on somebody will want ti for either currency or jewelry forever. That gives gold a slight edge. I don't know if it is significant, but it is a factor.
- QAPereo 9y agoGold is also truly fungible, and has maintained some value for thousands of years.
- wuliwong 9y agoI've thought about the idea that the value of a cryptocurrency is in its network. Since bitcoin has a large network it has some value that can't easily be copied or replicated. I have wondered if the value is actually closer to something like Facebook stock than gold.
- KomradeKeeks 9y agoGold is also a pretty good conductor of electricity
- bluGill 9y agoGold is at best Okay. There is a common belief that gold is a good conductor, but it has too high resistance. Look at the table https://en.wikipedia.org/wiki/Electrical_resistivity_and_conductivity https://en.wikipedia.org/wiki/Electrical_resistivity_and_con... gold is 5 on the list, well behind copper (which is what we use), and only barely ahead of aluminum.
- joosters 9y agoYes, there will be only 21 million bitcoins. Oops, fork! Now there will be 42 million. Another fork! Now the maximum is 63 million. There's no such thing as scarcity for a virtual currency.
- zodiac 9y agoPost-fork, two coins like BTC and BCH are not fungible either from the networks or from a user's point of view