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You're right, I was wrong to say without trust. I think it would have been more apt to say trust in their integrity. Demand can of course change, but your gold
by gnode 8y ago
You're right, I was wrong to say without trust. I think it would have been more apt to say trust in their integrity. Demand can of course change, but your gold won't be physically redefined by other parties.
I think an interesting difference between cryptocurrencies and precious metals, is that to some extent they can be redefined by consensus of the network, or split consensus (e.g. Etherium and Etherium Classic). So I'll concede that they don't even strictly negate the need for trust in their integrity.
- zrobotics 8y agoI think the bigger trust problem here is trusting that BTC will continue to have value. You have to trust that a market will continue to exist, there are plenty of cryptocurrencies that are worthless. There is no actual reason bitcoin has any value aside from market consensus, and the same could have been said about tulip bulbs at one point.
- gnode 8y agoYou have the same issues with gold also. Although it's very unlikely gold would lose most of its value, the price of gold throughout history has fluctuated greatly: https://upload.wikimedia.org/wikipedia/commons/e/e3/Gold_price_in_USD.png https://upload.wikimedia.org/wikipedia/commons/e/e3/Gold_pri... Even for assets with industrial applications, there's a risk that it may be replaced with something else, or made cheap (e.g. synthetic diamond; aluminium was a precious metal before electrolytic production; asteroid mining?). I agree with your comparison of Bitcoin to tulip bulbs. Just because Bitcoin is used as a store of value doesn't mean it's wise.