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> What future does an asset have if people don't actually buy stuff with it? Lots of assets have value without people buying things with them. Gold, houses, st

> What future does an asset have if people don't actually buy stuff with it? Lots of assets have value without people buying things with them. Gold, houses, stocks, etc. The more interesting question is how long Bitcoin will remain top dog merely as a store of value if other cryptocurrencies solve this on-chain / off-chain scaling problem better / faster. There's definitely some amount of value in the name alone, and some more in the security of the mining, but neither of those are unassailable.

prostoalex 9y ago
> Gold, houses, stocks, etc. With a caveat that houses and stocks can provide cashflow in terms of rent payments and dividends / option income.
- pembrook 9y ago
  ...And gold is a physical commodity with both industrial and consumer product applications.
  - Goladus 9y ago
    ... and stocks are a legal claim to some percentage of the assets of a corporation. The only things that I can think of that are somewhat similar to cryptocurrency as a "store of value" are things like baseball cards.
    - notahacker 9y ago
      ...and even collectibles have some appreciable aesthetic qualities and enthusiast interest which exists independently of and generally strictly prior to speculators getting involved.
    - saalweachter 9y ago
      Baseball cards are propped up by nostalgia; you take away the nostalgia, and the value crumbles.
- moduspol 9y ago
  Of course. And Bitcoin historically has provided speculative gains. The point is they can have value without being used to buy things directly.
- losteric 9y ago
  Incidentally, houses are also useful for shelter and storing other assets
- fastball 9y ago
  Cryptos have this in the form of gas (Ethereum and NEO for now). With the cryptocurrency NEO, because it's algorithm is Proof-of-Stake, merely holding some amount of NEO means you can sign transactions, and signing transactions earns you GAS, which has value.
wand3r 9y ago
While the parent's statement is wrong; it essentially makes the correct point. Gold has value as it is a store of wealth and maybe a case could be made that Bitcoin is that; though it is tougher now. Gold is used as a medium of exchange and the underpinnings historically for currency as some currency is literally minted out of it or was backed by it. However, other assets have value because they are useful. Per your examples a house is shelter and a stock is a virtual representation of the physical assets and receivables of a corporation which I should add has extreme market liquidity. Other assets like vehicles provide transportation and heavy machinery make products. I like Bitcoin and it may become/stay an asset class like gold; very illiquid and a store of wealth, but if that fails to materialize or continue after this speculation Bitcoin will be a lot more the AltaVista/Yahoo/Dogpile to Google search than the Gold to Cash analogy.
theptip 9y ago
Indeed, I'd go further and say that almost all assets are not used to buy stuff. That's what makes cash special, it's (one of?) the only asset you can freely spend.
Goladus 9y ago
> Lots of assets have value without people buying things with them. Gold, houses, stocks, etc. That value is predicated on the notion that they're worth something to the holder apart from their market price. Gold can be used for jewelry and electronics manufacturing. In that sense it is a natural resource. Stocks are shares in a company that runs a business or multiple businesses that could be profitable. Companies have financial obligations to their shareholders. People live in houses. Bitcoin's only function is to be exchanged. If no one is willing to give you anything for your bitcoin, it is completely worthless-- maybe even less than worthless when you factor transaction costs. The idea that it is a "store of value" is still predicated on bitcoin being a viable and accepted medium of exchange. This is different from a house, which you can still use even if no one will buy it. This is different from gold, as it is very hard to imagine a scenario where absolutely no one would buy your gold for at least for manufacturing. This is different from stocks, where the financial obligations to you can only be cleared by legal proceedings such as Chapter 7 bankruptcy.
- emodendroket 9y ago
  Besides that, there's a certain shifting of the goalposts going on when people who used to talk about Bitcoin replacing all the world's currencies instead start talking about the rising value of Bitcoin.
  - EnFinlay 9y ago
    My bet is that they're different people motivated by different things.
- moduspol 9y ago
  Bitcoin absolutely can still be exchanged, and (in many cases) far more easily and cheaper than gold. It can also be stored and secured much cheaper, and even large amounts can be easily taken across borders. That is real value, even if transaction fees are high, and even if you don't directly buy things with it.
  - Goladus 9y ago

prostoalex 9y ago

> Gold, houses, stocks, etc. With a caveat that houses and stocks can provide cashflow in terms of rent payments and dividends / option income.

pembrook 9y ago
...And gold is a physical commodity with both industrial and consumer product applications.
- Goladus 9y ago
  ... and stocks are a legal claim to some percentage of the assets of a corporation. The only things that I can think of that are somewhat similar to cryptocurrency as a "store of value" are things like baseball cards.
  - notahacker 9y ago
    ...and even collectibles have some appreciable aesthetic qualities and enthusiast interest which exists independently of and generally strictly prior to speculators getting involved.
  - saalweachter 9y ago
    Baseball cards are propped up by nostalgia; you take away the nostalgia, and the value crumbles.
moduspol 9y ago
Of course. And Bitcoin historically has provided speculative gains. The point is they can have value without being used to buy things directly.
losteric 9y ago
Incidentally, houses are also useful for shelter and storing other assets
fastball 9y ago
Cryptos have this in the form of gas (Ethereum and NEO for now). With the cryptocurrency NEO, because it's algorithm is Proof-of-Stake, merely holding some amount of NEO means you can sign transactions, and signing transactions earns you GAS, which has value.

wand3r 9y ago

While the parent's statement is wrong; it essentially makes the correct point. Gold has value as it is a store of wealth and maybe a case could be made that Bitcoin is that; though it is tougher now. Gold is used as a medium of exchange and the underpinnings historically for currency as some currency is literally minted out of it or was backed by it. However, other assets have value because they are useful. Per your examples a house is shelter and a stock is a virtual representation of the physical assets and receivables of a corporation which I should add has extreme market liquidity. Other assets like vehicles provide transportation and heavy machinery make products. I like Bitcoin and it may become/stay an asset class like gold; very illiquid and a store of wealth, but if that fails to materialize or continue after this speculation Bitcoin will be a lot more the AltaVista/Yahoo/Dogpile to Google search than the Gold to Cash analogy.

theptip 9y ago

Indeed, I'd go further and say that almost all assets are not used to buy stuff. That's what makes cash special, it's (one of?) the only asset you can freely spend.

Goladus 9y ago

> Lots of assets have value without people buying things with them. Gold, houses, stocks, etc. That value is predicated on the notion that they're worth something to the holder apart from their market price. Gold can be used for jewelry and electronics manufacturing. In that sense it is a natural resource. Stocks are shares in a company that runs a business or multiple businesses that could be profitable. Companies have financial obligations to their shareholders. People live in houses. Bitcoin's only function is to be exchanged. If no one is willing to give you anything for your bitcoin, it is completely worthless-- maybe even less than worthless when you factor transaction costs. The idea that it is a "store of value" is still predicated on bitcoin being a viable and accepted medium of exchange. This is different from a house, which you can still use even if no one will buy it. This is different from gold, as it is very hard to imagine a scenario where absolutely no one would buy your gold for at least for manufacturing. This is different from stocks, where the financial obligations to you can only be cleared by legal proceedings such as Chapter 7 bankruptcy.

emodendroket 9y ago
Besides that, there's a certain shifting of the goalposts going on when people who used to talk about Bitcoin replacing all the world's currencies instead start talking about the rising value of Bitcoin.
- EnFinlay 9y ago
  My bet is that they're different people motivated by different things.
moduspol 9y ago
Bitcoin absolutely can still be exchanged, and (in many cases) far more easily and cheaper than gold. It can also be stored and secured much cheaper, and even large amounts can be easily taken across borders. That is real value, even if transaction fees are high, and even if you don't directly buy things with it.
- Goladus 9y ago