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In the end Bitcoin is so similar to Gold. It is a means of storing wealth and is valued on a shared belief of finite quantities and that it is an effective/sec
by bhouston 9y ago
In the end Bitcoin is so similar to Gold. It is a means of storing wealth and is valued on a shared belief of finite quantities and that it is an effective/secure means of storing wealth.
It is hard for me to call a shared belief a bubble, because there is a clear understanding I think now that there is no underlying fundamental asset value.
- hockeybias 9y agoI bet not all of the participants have a clear understanding...
- zerostar07 9y agoI presume the implication of calling it a bubble is that it will "burst".
- deleted 9y ago[deleted]
- zimablue 9y agoGold has a floor value though, sure it has a value above that based on being used as a store of wealth but the whole thing is predicated on the fact that gold is actually useful and has thousands of years of human history of being valued.
- lawlessone 9y agobitcoin will still have a sort of floor value for the various illegal things it was and is still use for. Obviously though that is far far lower than what it is now.
- zimablue 9y agoI see your point but even on that - there are alternative blockchains, we could all just swap to litecoins and send it to zero. If it were the only feasible crypto it would have some sort of floor I agree but factor in altcoins and it actually doesn't have any.
- lawlessone 9y agoTrue, there are others, some with more privacy built in , bitcoin enjoys a network effect for now. That might change.
- UncleMeat 9y agoExcept there are other coins that are better for illegal transactions.
- prostoalex 9y agoPeople who do various illegal things hate volatility. They are already dealing with a number of risks, they don’t need another one added to the mix, where the supplier/boss can bust their kneecaps if the underlying cryptocurrency just went through a 5% “correction”.
- kgwgk 9y ago> transfer wealth It works really well for that, for those cashing out.
- krrrh 9y agoBitcoin is like gold, except we have alchemy, and an infinite series of new elements between 78 and 80.
- lawlessone 9y agobrb buying bars of uranium...
- rhino369 9y agoI don't think Bitcoin is like gold at all because I don't think there is a common belief that "it is an effective/secure means of storing wealth." A small number of people think that now because Bitcoin is in a huge run up. If bitcoin crashes 90%, it suddenly stops being a "secure means of storing wealth" and, instead, is a means of throwing away your wealth. If the market psychology changes, bitcoin becomes worthless. Gold has the same problem, but has a huge historical record of actually being somewhat stable. And there is a price floor for practice demand of gold, though I'm not sure what that is.
- scottnyc 9y agoI'll disagree. Gold once mined will be there for us forever. Bitcoin once mined will need us to perpetually mine it to exist. Gold will survive a nuclear war. EMP blasts, Hard drive failures, viruses, quantum computing and the lack of an internet connection aren't real risks to gold. In the throws of WWIII, with buildings burning to the ground off in the distance, as you cross the border to mexico with just the clothes on your back, which would you rather line the seams of your jacket with: gold? Or a piece of paper with some numbers that unlocked your 'virtual currency'? Let's see how well that shared belief holds up then.