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> Bitcoin ... show that its a gold replacement by performing well when the market goes to shit I think it should be pretty clear that Bitcoin is not a gold rep

> Bitcoin ... show that its a gold replacement by performing well when the market goes to shit I think it should be pretty clear that Bitcoin is not a gold replacement. Neither have any intrinsic value (unlike property), except that gold has been in use for thousands of years. If the market goes to shit, then so does Bitcoin, because it's a bubble.

djrogers 9y ago
> Neither have any intrinsic value Gold has a million industrial, scientific, and cosmetic uses that give it intrinsic value.
- hangonhn 9y ago
  But its use in those areas is dwarfed by its use as a store of value. Or to put it a different way, its industrial, scientific, and cosmetic usage has a far smaller effect on its price than people buying it as a stable store of value.
  - aylmao 9y ago
    I guess what the previous comment was getting at is that it at least has _some_ value outside of being a financial tool. Bitcoins aren't even physical so they are not even useful as paperweights.
- bbatha 9y ago
  But the utility of those applications does not translate into gold’s current price. Most of gold’s value is from speculators and people using it as a wealth store.
- ori_b 9y ago
  If that's true, why is it sitting in vaults instead of being consumed for those uses?
  - nikanj 9y ago
    The same reason a lot of very expensive land is sitting undeveloped. Whoever owns it, is betting they can get a higher payment for the usage tomorrow than today.
    - seanmcdirmid 9y ago
      Good is useful in production, but is hardly irreplaceable in its uses. Thankfully, platinum hasn’t become a speculative asset yet.
  - Clubber 9y ago
    Because FDR took most of it. https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102
- nerfhammer 9y ago
  "intrinsic" is a bad word. really we should be saying like "non-speculative" or "utility" value or something. The price as if no one had ever thought to price it to sell to other speculators. gold's price is some part speculative some part non-speculative. Non-speculative value gives it some kind of price floor, but the price can be way above the floor. For instance, if the price of gold jumps 2x it's not necessarily because gold jewelry became twice as popular in the same time period.
  - AnimalMuppet 9y ago
    There's betting that the price will go up. That's speculative. There's industrial use. That's non-speculative. And there's kind of a third category that I don't know how to name. I can invest in gold because I want something that will retain value, even if it doesn't grow. I'm gambling, if you like, but I'm gambling that people will still want gold for more than industrial and cosmetic uses. In a big world, where in a variety of places people fear that their government will try to take their assets (either through confiscation or inflation), that seems like a reasonable gamble. I have a hard time classifying it with "speculation". It's still a gamble, but it's a pretty conservative one.
    - seanmcdirmid 9y ago
      You are also gambling that mining doesn’t increase, that new technology doesn’t make finding new reserves easier, etc... you are also giving power to the countries that mine the most gold (China, South Africa, Russia, Australia, Peru, Canada, the USA).
      - AnimalMuppet 9y ago
        New gold is a very small fraction of the gold supply, so I'm not giving much power to those who mine the most (currently). A major new discovery could change things, but it would have to be huge. Mining (or, more probably, refining) becoming easier could change things more than a big discovery, by making many uneconomic deposits suddenly economically viable to work. Most fundamentally, I'm gambling that the chemical composition of the earth's crust isn't going to change much. That part of the gamble I feel pretty confident about.
mrhappyunhappy 9y ago
Stone tools lasted for thousands of years too. Calling an emerging tech a bubble is like calling the first wave of autos a fluke.
shrimpx 9y ago
Bitcoin has intrinsic value: trustless transfer of digital quantity. Speculative bubbles can happen around anything, whether it has value or not. Beanie babies and AI are examples of things that were/are the subject of speculative bubbles. It's really hard to imagine the Bitcoin tech will just poof go away when the market tanks. No way.
- erikpukinskis 9y ago
  You’re spot on. But while Bitcoin almost certainly won’t go poof, it could dry up. ETH and Monero each take a slice of the market away (smart contracts and anonymous, respectively). More will come that take away more niches. Lots of things can transfer quantity trustlessly now. The question is: in a world with thousands of established way to send quantity, how much is the “plain old ledger” worth?

djrogers 9y ago

> Neither have any intrinsic value Gold has a million industrial, scientific, and cosmetic uses that give it intrinsic value.

hangonhn 9y ago
But its use in those areas is dwarfed by its use as a store of value. Or to put it a different way, its industrial, scientific, and cosmetic usage has a far smaller effect on its price than people buying it as a stable store of value.
- aylmao 9y ago
  I guess what the previous comment was getting at is that it at least has _some_ value outside of being a financial tool. Bitcoins aren't even physical so they are not even useful as paperweights.
bbatha 9y ago
But the utility of those applications does not translate into gold’s current price. Most of gold’s value is from speculators and people using it as a wealth store.
ori_b 9y ago
If that's true, why is it sitting in vaults instead of being consumed for those uses?
- nikanj 9y ago
  The same reason a lot of very expensive land is sitting undeveloped. Whoever owns it, is betting they can get a higher payment for the usage tomorrow than today.
  - seanmcdirmid 9y ago
    Good is useful in production, but is hardly irreplaceable in its uses. Thankfully, platinum hasn’t become a speculative asset yet.
- Clubber 9y ago
  Because FDR took most of it. https://en.wikipedia.org/wiki/Executive_Order_6102 https://en.wikipedia.org/wiki/Executive_Order_6102
nerfhammer 9y ago
"intrinsic" is a bad word. really we should be saying like "non-speculative" or "utility" value or something. The price as if no one had ever thought to price it to sell to other speculators. gold's price is some part speculative some part non-speculative. Non-speculative value gives it some kind of price floor, but the price can be way above the floor. For instance, if the price of gold jumps 2x it's not necessarily because gold jewelry became twice as popular in the same time period.
- AnimalMuppet 9y ago
  There's betting that the price will go up. That's speculative. There's industrial use. That's non-speculative. And there's kind of a third category that I don't know how to name. I can invest in gold because I want something that will retain value, even if it doesn't grow. I'm gambling, if you like, but I'm gambling that people will still want gold for more than industrial and cosmetic uses. In a big world, where in a variety of places people fear that their government will try to take their assets (either through confiscation or inflation), that seems like a reasonable gamble. I have a hard time classifying it with "speculation". It's still a gamble, but it's a pretty conservative one.
  - seanmcdirmid 9y ago
    You are also gambling that mining doesn’t increase, that new technology doesn’t make finding new reserves easier, etc... you are also giving power to the countries that mine the most gold (China, South Africa, Russia, Australia, Peru, Canada, the USA).
    - AnimalMuppet 9y ago
      New gold is a very small fraction of the gold supply, so I'm not giving much power to those who mine the most (currently). A major new discovery could change things, but it would have to be huge. Mining (or, more probably, refining) becoming easier could change things more than a big discovery, by making many uneconomic deposits suddenly economically viable to work. Most fundamentally, I'm gambling that the chemical composition of the earth's crust isn't going to change much. That part of the gamble I feel pretty confident about.

mrhappyunhappy 9y ago

Stone tools lasted for thousands of years too. Calling an emerging tech a bubble is like calling the first wave of autos a fluke.

shrimpx 9y ago

Bitcoin has intrinsic value: trustless transfer of digital quantity. Speculative bubbles can happen around anything, whether it has value or not. Beanie babies and AI are examples of things that were/are the subject of speculative bubbles. It's really hard to imagine the Bitcoin tech will just poof go away when the market tanks. No way.

erikpukinskis 9y ago
You’re spot on. But while Bitcoin almost certainly won’t go poof, it could dry up. ETH and Monero each take a slice of the market away (smart contracts and anonymous, respectively). More will come that take away more niches. Lots of things can transfer quantity trustlessly now. The question is: in a world with thousands of established way to send quantity, how much is the “plain old ledger” worth?