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There's a difference about Gold's rarity and Bitcoin's. Gold is rare on its kind and rare on its abundance. It may be hard to mine more gold, but it's way hard

There's a difference about Gold's rarity and Bitcoin's. Gold is rare on its kind and rare on its abundance. It may be hard to mine more gold, but it's way harder to find another gold-like commodity. Bitcoin is only rare in the abundance sense. It is hard to mine more bitcoin, but it's pretty easy to find a (arguably better) substitute for what it does. I can agree with it being better (having more utility) than gold, though. So I'd agree that the sum of all e-coins will surpass gold, but I see no reason for Bitcoin to do it alone.

WorldMaker 9y ago
Bitcoin definitely isn't rare in kind as we've already seen how relatively "easy" it is to fork. Could just fork Bitcoin infinitely as one way to deal with its supposed scarcity. Bitcoin isn't even rare in the abundance sense if you consider that how hard it is to mine new coins is merely a function of a mathematical curve that can be adjusted as a software change. Certainly any change to the mining difficulty and/or coin pool ceiling would be hugely controversial, but it's not like it's mathematically impossible merely politically improbable, for now.
- derekp7 9y ago
  The thing that is rare is the total amount of mining nodes behind bitcoin. That is what you are buying into, is mindshare. Of course the mining nodes are mostly profit driven. If another coin had a higher profit margin, the miners would switch over to that coin.
  - WorldMaker 9y ago
    That rarity too is also software controlled based on the difficulty curve. Bitcoin doesn't have to boil the oceans, it could make mining easy enough again that transactions could be mined in a coffee break on an average person's smart phone's GPU. As I said, the scarcity of Bitcoin is much more a political structure than an inherent nature of Bitcoin. The miners control Bitcoin so much as anyone does and it is their political intent as much as anything else that creates any scarcity in Bitcoin at all.
- pfisch 9y ago
  Forking bitcoin doesn't create more bitcoins. It creates something else that is not bitcoins any longer that will not be accepted anywhere.
  - WorldMaker 9y ago
    The philosophical and political reality of what makes a "real" Bitcoin that people can accept is outside of the question of scarcity. The fact that a Bitcoin can be endlessly "duplicated", at the whims of software developers and/or miners, regardless of how likely or improbable they may be able to be "spent" should definitely give people some pause in their Tulip mania that Bitcoins are not by their nature inherently a scarce commodity. They are scarce only so far as the political reality in which they are transacted continues to keep them scarce.
    - pfisch 9y ago
      But they are in fact different. Maybe not as different as gold vs silver but similar in that gold and silver also have completely artificial values driven by hype.
KaoruAoiShiho 9y ago
What do you mean gold is rare on its own kind? Aren't there tons of other pretty metals? There doesn't seem to be any unique property of gold (other than sociological) that would help it defend against competitors like bitcoin or any other new asset.
- scaryspooky 9y ago
  Gold is insanely useful as a conductive metal.
- felipeko 9y ago
  You can't find another precious metal that will have the rarity of gold and it's "non deterioration" property, both that made gold what it is (it's also a really useful commodity). But i agree that's not enough to defend against competitors like Bitcoin, but the same cannot be said of Bitcoin. Other than sociological factors (that are arguably much stronger on gold), there's nothing that would help it defend against others e-coins.
  - gruez 9y ago
    >You can't find another precious metal that will have the rarity of gold and it's "non deterioration" property, both that made gold what it is (it's also a really useful commodity). platinum. i will agree that gold is easier to tell apart (it's yellow) than platinum. although realistically that's a moot point because you're going to want to do chemical tests when dealing in non-trivial amounts of precious metals.
    - felipeko 9y ago
      You got me! :) Now find a few hundreds more and we will be closer (not really) to Bitcoin's rarity of kind.
    - munchbunny 9y ago
      Which is even more rare for when you need to deal with issues like environmental temperatures going over 800C. The same argument applies to platinum: it has essential physical applications that are hard to replicate, so it will retain a high baseline value just on the merits of "we need it for essential hardware." If a cryptocurrency manages to pull off the software equivalent of "essential engineering applications," then the conversation about cryptocurrencies will change dramatically. As it stands, blockchains will probably prove to be situationally useful, but blockchain =/= cryptocurrency.
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saalweachter 9y ago
Another critical difference is that there are commodity uses of gold. The price of gold will never go to zero; it might go to $100 or $10 per oz if all speculation and hoarding were removed from the market but it wouldn't go to $0.
- jstanley 9y ago
  And what's that got to do with bitcoin? If you're going to assert that gold can't go to $0 and imply that bitcoin can, you need to also give a good reason why bitcoin can go to $0.
  - fastball 9y ago
    At one point in time, Bitcoin was worthless. Therefore it is provable that it can be worthless. At no point in history has gold been worthless. As far as you and I know, gold has had worth as long as society has had the capability to get it.
    - erikpukinskis 9y ago
      False. At one point Mussolini was alive. Therefore it is provable that Mussolini could live again. Sorry, try again. At one point, these grains of sand were in this glass. Then I poured them into the ocean. But they were in the glass so they could be in there again. Except no, no they couldn’t. The 2nd law of thermodynamics makes many things non-repeatable.
      - fastball 9y ago
        You are making the opposite claim to mine, they are not comparable. Try these on for size: Before his birth, Mussolini was not alive. Therefore, it is possible that he could not be alive again. At one point, there were no grains of sand in this glass. Therefore it is possible that there will be no grains of sand in this glass again. Thermodynamics is really not the tool you should bring to bear in this conversation. Entropy dictates that eventually everything will be worthless, and that includes Bitcoin. The price of Bitcoin is not an irreversible product of entropy, despite what some investors might wish.
dahdum 9y ago
"So I'd agree that the sum of all e-coins will surpass gold, but I see no reason for Bitcoin to do it alone." We could pick any number of gold-like commmodities, but like Bitcoin, gold has had a history of large expenditures to acquire it. Both are buoyed by that past. So many tokens and blockchains are coming out with incremental improvements or niche capabilities, but in the end I think consolidation of market cap is inevitable. I think it ends up Bitcoin as store of value, Ethereum as contracts/api and a large amount of application specific token/chains. Most applications would be backed by ethereum (like most tokens are now), but ones like Ripple could definitely be top 5.
- hyprCoin 9y ago
  I respectfully disagree with your conclusion. There isn't one company for internet searches and there isn't one provider for online video content. Why should there be just a handful of currencies? The natural state of a healthy ecosystem includes competition and variety.
  - zaidf 9y ago
    There is only a handful of companies for internet search, no?
  - dahdum 9y ago
    75% of all searches are Google, 10% Baidu, and 8% Bing. Youtube represents the vast majority of online video content. Netflix the vast majority of on demand television. I only mean to say a handful will capture the vast majority of market share/cap.
    - atwebb 9y ago
      For now, those companies were different 10 years ago, Netflix has it's own issues if my viewing options are the same as everyone else's these days.
    - hyprCoin 9y ago
      Google is losing market share of searches last I looked. Baidu searches have doubled in percentage marketshare. Youtube and netflix are both on demand television as are amazon instant, modern cable tv subscriptions, and a variety of specific channels (hbo, showtime, etc). There will definitely be use case dominance, but they may not be the same whales as we currently see.
lsadam0 9y ago
We live in a world where the near-ish future could bring us asteroid mining. Something that could devastate the rarity of abundance of gold.
- felipeko 9y ago
  That is true, and this should really factor in the decline of gold in the future, but this does not help Bitcoin against it's e-coins rivals. And isn't Bitcoin hackable in a near-ish future with quantum computing?
  - sumedh 9y ago
    > quantum computing? I have been hearing that for last 15 years.
  - lsadam0 9y ago
    Yes, in it’s current state it most certainly is. Though as I recall there are already proposed updates to address this threat.
pishpash 9y ago
It's not even rare in abundance. Every fork (Bitcoin Cash!?) defeats its supposed non-abundance.
mtgx 9y ago
That doesn't make much sense. I think you set up a rather arbitrary definition for this. Here's my attempt: Gold is just a "metal" just like Bitcoin is a "cryptocurrency." There are many types of metals and other materials. Some can directly replace gold while others have way different uses - just like cryptocurrencies.

WorldMaker 9y ago

Bitcoin definitely isn't rare in kind as we've already seen how relatively "easy" it is to fork. Could just fork Bitcoin infinitely as one way to deal with its supposed scarcity. Bitcoin isn't even rare in the abundance sense if you consider that how hard it is to mine new coins is merely a function of a mathematical curve that can be adjusted as a software change. Certainly any change to the mining difficulty and/or coin pool ceiling would be hugely controversial, but it's not like it's mathematically impossible merely politically improbable, for now.

derekp7 9y ago
The thing that is rare is the total amount of mining nodes behind bitcoin. That is what you are buying into, is mindshare. Of course the mining nodes are mostly profit driven. If another coin had a higher profit margin, the miners would switch over to that coin.
- WorldMaker 9y ago
  That rarity too is also software controlled based on the difficulty curve. Bitcoin doesn't have to boil the oceans, it could make mining easy enough again that transactions could be mined in a coffee break on an average person's smart phone's GPU. As I said, the scarcity of Bitcoin is much more a political structure than an inherent nature of Bitcoin. The miners control Bitcoin so much as anyone does and it is their political intent as much as anything else that creates any scarcity in Bitcoin at all.
pfisch 9y ago
Forking bitcoin doesn't create more bitcoins. It creates something else that is not bitcoins any longer that will not be accepted anywhere.
- WorldMaker 9y ago
  The philosophical and political reality of what makes a "real" Bitcoin that people can accept is outside of the question of scarcity. The fact that a Bitcoin can be endlessly "duplicated", at the whims of software developers and/or miners, regardless of how likely or improbable they may be able to be "spent" should definitely give people some pause in their Tulip mania that Bitcoins are not by their nature inherently a scarce commodity. They are scarce only so far as the political reality in which they are transacted continues to keep them scarce.
  - pfisch 9y ago
    But they are in fact different. Maybe not as different as gold vs silver but similar in that gold and silver also have completely artificial values driven by hype.

KaoruAoiShiho 9y ago

What do you mean gold is rare on its own kind? Aren't there tons of other pretty metals? There doesn't seem to be any unique property of gold (other than sociological) that would help it defend against competitors like bitcoin or any other new asset.

scaryspooky 9y ago
Gold is insanely useful as a conductive metal.
felipeko 9y ago
You can't find another precious metal that will have the rarity of gold and it's "non deterioration" property, both that made gold what it is (it's also a really useful commodity). But i agree that's not enough to defend against competitors like Bitcoin, but the same cannot be said of Bitcoin. Other than sociological factors (that are arguably much stronger on gold), there's nothing that would help it defend against others e-coins.
- gruez 9y ago
  >You can't find another precious metal that will have the rarity of gold and it's "non deterioration" property, both that made gold what it is (it's also a really useful commodity). platinum. i will agree that gold is easier to tell apart (it's yellow) than platinum. although realistically that's a moot point because you're going to want to do chemical tests when dealing in non-trivial amounts of precious metals.
  - felipeko 9y ago
    You got me! :) Now find a few hundreds more and we will be closer (not really) to Bitcoin's rarity of kind.
  - munchbunny 9y ago
    Which is even more rare for when you need to deal with issues like environmental temperatures going over 800C. The same argument applies to platinum: it has essential physical applications that are hard to replicate, so it will retain a high baseline value just on the merits of "we need it for essential hardware." If a cryptocurrency manages to pull off the software equivalent of "essential engineering applications," then the conversation about cryptocurrencies will change dramatically. As it stands, blockchains will probably prove to be situationally useful, but blockchain =/= cryptocurrency.

deleted 9y ago

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saalweachter 9y ago

Another critical difference is that there are commodity uses of gold. The price of gold will never go to zero; it might go to $100 or $10 per oz if all speculation and hoarding were removed from the market but it wouldn't go to $0.

jstanley 9y ago
And what's that got to do with bitcoin? If you're going to assert that gold can't go to $0 and imply that bitcoin can, you need to also give a good reason why bitcoin can go to $0.
- fastball 9y ago
  At one point in time, Bitcoin was worthless. Therefore it is provable that it can be worthless. At no point in history has gold been worthless. As far as you and I know, gold has had worth as long as society has had the capability to get it.
  - erikpukinskis 9y ago
    False. At one point Mussolini was alive. Therefore it is provable that Mussolini could live again. Sorry, try again. At one point, these grains of sand were in this glass. Then I poured them into the ocean. But they were in the glass so they could be in there again. Except no, no they couldn’t. The 2nd law of thermodynamics makes many things non-repeatable.
    - fastball 9y ago
      You are making the opposite claim to mine, they are not comparable. Try these on for size: Before his birth, Mussolini was not alive. Therefore, it is possible that he could not be alive again. At one point, there were no grains of sand in this glass. Therefore it is possible that there will be no grains of sand in this glass again. Thermodynamics is really not the tool you should bring to bear in this conversation. Entropy dictates that eventually everything will be worthless, and that includes Bitcoin. The price of Bitcoin is not an irreversible product of entropy, despite what some investors might wish.

dahdum 9y ago

"So I'd agree that the sum of all e-coins will surpass gold, but I see no reason for Bitcoin to do it alone." We could pick any number of gold-like commmodities, but like Bitcoin, gold has had a history of large expenditures to acquire it. Both are buoyed by that past. So many tokens and blockchains are coming out with incremental improvements or niche capabilities, but in the end I think consolidation of market cap is inevitable. I think it ends up Bitcoin as store of value, Ethereum as contracts/api and a large amount of application specific token/chains. Most applications would be backed by ethereum (like most tokens are now), but ones like Ripple could definitely be top 5.

hyprCoin 9y ago
I respectfully disagree with your conclusion. There isn't one company for internet searches and there isn't one provider for online video content. Why should there be just a handful of currencies? The natural state of a healthy ecosystem includes competition and variety.
- zaidf 9y ago
  There is only a handful of companies for internet search, no?
- dahdum 9y ago
  75% of all searches are Google, 10% Baidu, and 8% Bing. Youtube represents the vast majority of online video content. Netflix the vast majority of on demand television. I only mean to say a handful will capture the vast majority of market share/cap.
  - atwebb 9y ago
    For now, those companies were different 10 years ago, Netflix has it's own issues if my viewing options are the same as everyone else's these days.
  - hyprCoin 9y ago
    Google is losing market share of searches last I looked. Baidu searches have doubled in percentage marketshare. Youtube and netflix are both on demand television as are amazon instant, modern cable tv subscriptions, and a variety of specific channels (hbo, showtime, etc). There will definitely be use case dominance, but they may not be the same whales as we currently see.

lsadam0 9y ago

We live in a world where the near-ish future could bring us asteroid mining. Something that could devastate the rarity of abundance of gold.

felipeko 9y ago
That is true, and this should really factor in the decline of gold in the future, but this does not help Bitcoin against it's e-coins rivals. And isn't Bitcoin hackable in a near-ish future with quantum computing?
- sumedh 9y ago
  > quantum computing? I have been hearing that for last 15 years.
- lsadam0 9y ago
  Yes, in it’s current state it most certainly is. Though as I recall there are already proposed updates to address this threat.

pishpash 9y ago

It's not even rare in abundance. Every fork (Bitcoin Cash!?) defeats its supposed non-abundance.

mtgx 9y ago

That doesn't make much sense. I think you set up a rather arbitrary definition for this. Here's my attempt: Gold is just a "metal" just like Bitcoin is a "cryptocurrency." There are many types of metals and other materials. Some can directly replace gold while others have way different uses - just like cryptocurrencies.