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In the old days, government issued currencies had value because you could trade them in for gold or silver. In contemporary times, they have some value because

In the old days, government issued currencies had value because you could trade them in for gold or silver. In contemporary times, they have some value because everyone that lives in a particular country is legally required to pay taxes and those taxes can only be paid in the relevant government issued currency. Gold is just about the only thing around that acts somewhat like money but isn't premised on much of anything except social constructed value. Though even there, there are jewelry and electronic uses. I could believe that we could could get something else like gold that would be bootstrapped into having a relatively stable purely social constructed value. But as you point out, there isn't just one altcoin that has solved (some of) the problems of bitcoins, there are lots. There are huge incentives to issue new altcoins and for speculators to buy new altcoins in hopes of being the winner. And those speculators and creators are all hoping for this huge volatility (albeit in one direction) while what's strongly preferred for a medium of exchange is value stability. I don't see how we get there from here. What process or trends out there look convergent and stabilizing to you?

digi_owl 9y ago
Gold, and silver, was nice metals for making durable tokens off back in the day. What made said tokens currency was not the metal, but the stamp. That said, daily, local, transactions were likely done either using simpler copper tokens or basically a verbal or written IOU.
- Chaebixi 9y ago
  > What made said tokens currency was not the metal, but the stamp. No, at least not always. IIRC, in Ancient Greece the money was the precious metal itself and its value of a coin was reckoned based on its weight and purity. The stamp was just an indicator of purity. The very largest amounts of money were measured using weight units (e.g. talents). It would have been impossible for it to be otherwise, since there were so many competing coin standards (e.g. a drachma in one city could be made to a very different standard to another, with standard weights possibly varying by as much as 50% or something).
  - bradleyjg 9y ago
    Right. If it was all about the stamp, the Gresham's law wouldn't exist.
- real_estate 9y ago
  Relevant Duck Tales episode: http://www.tv.com/shows/ducktales/the-land-of-tra-la-la-342746/ http://www.tv.com/shows/ducktales/the-land-of-tra-la-la-3427...
- rabidonrails 9y ago
  This is incorrect. The gold itself was valuable, and specifically gold because there were ways to tell in ancient times that it _was_ gold, and how pure it was. It helps that it's easily malleable for coinage too. I believe there was an episode of Connections that I saw as a kid where he explains why gold was used as currency. I'm searching for it and will link if I find it.
sunseb 9y ago
You can't duplicate physical gold, but it takes 30 seconds to launch a copy of Bitcoin (Bitcoin Cash, Bitcoin Gold and so) or to launch a new altcoin as well. So no, Bitcoin is not a store of value like Gold. This "Bitcoin is digital gold" excuse is what greedy people tell themselves (and others), because Bitcoin didn't work as money (to buy and sell stuff, yeah the original vision of Satoshi).
- tehsauce 9y ago
  Exactly! The "limited supply" argument for the value cryptocurrency totally ignores the fact that anyone can fork or create a brand new token every day of the week. Nothing like gold or any assets tied to the physical world.
  - sunseb 9y ago
    Gold is the only metal that doesn't rust, even if it's buried in the ground for thousands of years. Gold is rare. And gold has the color of the sun. It's crazy if we think about that, it's like money made by the gods for us.
    - ericb 9y ago
      Platinum doesn't rust, neither does silver.
      - bunderbunder 9y ago
        Silver corrodes quite readily. That's why you've got to keep polishing it if you want it to be shiny.
- ericb 9y ago
  Gold's value comes from being a natural Schelling point, not it's intrinsic value. There are copies (silver, platinum) but they don't have the same value as they aren't serving as the main Schelling point. So the copies aren't a problem. The market will "pick" one over time, and then everyone will mostly use that because that's what everyone uses. Any of the crypto's could make a superior store of value vs. gold. https://en.wikipedia.org/wiki/Focal_point_(game_theory) https://en.wikipedia.org/wiki/Focal_point_(game_theory)
bunderbunder 9y ago
> In contemporary times, they have some value because everyone that lives in a particular country is legally required to pay taxes and those taxes can only be paid in the relevant government issued currency. You've got it half right. In most countries, private individuals and organizations are also required to accept the state currency for at least some purposes. In the USA, for example, creditors are required to accept US banknotes in payment of debts. This places US dollars firmly at the core of the US financial system. This doesn't create any legal obligation for US businesses to accept dollars, but it does create a very strong incentive for them to accept dollars in some form. That's the currency in which their finances will almost certainly need to be conducted if they want to have access to things like banking. That creates a situation where the US dollar isn't just valuable insofar as you can use it to pay your taxes. It is, de facto but also very nearly de jure, backed by virtually the entire United States economy. Bitcoin, on the other hand, really is backed by nothing but its own popularity. And the problem there is, it's really not that popular. It does have a lot of users worldwide, and those users can communicate over the Internet, but the same is true of Esperanto.

digi_owl 9y ago

Gold, and silver, was nice metals for making durable tokens off back in the day. What made said tokens currency was not the metal, but the stamp. That said, daily, local, transactions were likely done either using simpler copper tokens or basically a verbal or written IOU.

Chaebixi 9y ago
> What made said tokens currency was not the metal, but the stamp. No, at least not always. IIRC, in Ancient Greece the money was the precious metal itself and its value of a coin was reckoned based on its weight and purity. The stamp was just an indicator of purity. The very largest amounts of money were measured using weight units (e.g. talents). It would have been impossible for it to be otherwise, since there were so many competing coin standards (e.g. a drachma in one city could be made to a very different standard to another, with standard weights possibly varying by as much as 50% or something).
- bradleyjg 9y ago
  Right. If it was all about the stamp, the Gresham's law wouldn't exist.
real_estate 9y ago
Relevant Duck Tales episode: http://www.tv.com/shows/ducktales/the-land-of-tra-la-la-342746/ http://www.tv.com/shows/ducktales/the-land-of-tra-la-la-3427...
rabidonrails 9y ago
This is incorrect. The gold itself was valuable, and specifically gold because there were ways to tell in ancient times that it _was_ gold, and how pure it was. It helps that it's easily malleable for coinage too. I believe there was an episode of Connections that I saw as a kid where he explains why gold was used as currency. I'm searching for it and will link if I find it.

sunseb 9y ago

You can't duplicate physical gold, but it takes 30 seconds to launch a copy of Bitcoin (Bitcoin Cash, Bitcoin Gold and so) or to launch a new altcoin as well. So no, Bitcoin is not a store of value like Gold. This "Bitcoin is digital gold" excuse is what greedy people tell themselves (and others), because Bitcoin didn't work as money (to buy and sell stuff, yeah the original vision of Satoshi).

tehsauce 9y ago
Exactly! The "limited supply" argument for the value cryptocurrency totally ignores the fact that anyone can fork or create a brand new token every day of the week. Nothing like gold or any assets tied to the physical world.
- sunseb 9y ago
  Gold is the only metal that doesn't rust, even if it's buried in the ground for thousands of years. Gold is rare. And gold has the color of the sun. It's crazy if we think about that, it's like money made by the gods for us.
  - ericb 9y ago
    Platinum doesn't rust, neither does silver.
    - bunderbunder 9y ago
      Silver corrodes quite readily. That's why you've got to keep polishing it if you want it to be shiny.
ericb 9y ago
Gold's value comes from being a natural Schelling point, not it's intrinsic value. There are copies (silver, platinum) but they don't have the same value as they aren't serving as the main Schelling point. So the copies aren't a problem. The market will "pick" one over time, and then everyone will mostly use that because that's what everyone uses. Any of the crypto's could make a superior store of value vs. gold. https://en.wikipedia.org/wiki/Focal_point_(game_theory) https://en.wikipedia.org/wiki/Focal_point_(game_theory)

bunderbunder 9y ago

> In contemporary times, they have some value because everyone that lives in a particular country is legally required to pay taxes and those taxes can only be paid in the relevant government issued currency. You've got it half right. In most countries, private individuals and organizations are also required to accept the state currency for at least some purposes. In the USA, for example, creditors are required to accept US banknotes in payment of debts. This places US dollars firmly at the core of the US financial system. This doesn't create any legal obligation for US businesses to accept dollars, but it does create a very strong incentive for them to accept dollars in some form. That's the currency in which their finances will almost certainly need to be conducted if they want to have access to things like banking. That creates a situation where the US dollar isn't just valuable insofar as you can use it to pay your taxes. It is, de facto but also very nearly de jure, backed by virtually the entire United States economy. Bitcoin, on the other hand, really is backed by nothing but its own popularity. And the problem there is, it's really not that popular. It does have a lot of users worldwide, and those users can communicate over the Internet, but the same is true of Esperanto.