3 ms·
The gold analogy makes me so nervous. Gold has specific and permanent properties (eg, high density, an entry in the periodic table :P). Many detractors of gold
by another-one-off 9y ago
The gold analogy makes me so nervous. Gold has specific and permanent properties (eg, high density, an entry in the periodic table :P). Many detractors of gold claim those properties are not valuable, but it still has them and is specific and unique.
Bitcoin has mathematical properties that can be 100% cloned. The only thing that makes bitcoin unique from some random bitcoin clone is that it has the backing of a big mining networks.
I firmly believe that whatever value bitcoin has is tied to the size of the mining network, and by extension to the energy burned to transact bitcoins. This simply isn't close to being permanent in the same way gold is. It could potentially work like a social thing, and go the way of, eg, MySpace. I don't see how that can hold its value for a generation; the risk of current prices being a blip is still very high.
- coralreef 9y agoBitcoin can be cloned the same way Facebook can be cloned. You could spend a billion dollars copying Facebook's features and spend a billion marketing it, and you'd still fail. The mining network behind it, the developer ecosystem working on wallets/libraries/services, etc. is the hard part to copy. It's worth the most, therefore it attracts the most time and attention, which helps to maintain its value. It may not be the best from a technical standpoint, but the size of it ensures a healthy financial incentive to improve upon it, which we're seeing now with layered scaling efforts (lightning network).