4 ms·

You missed one use case which is digital gold, which accounts for most of the price.

aedron 7y ago
I used to dismiss this view, because it seems so impropable that an arbitrary digital asset would be able to fill a role like gold. But it does seem to be happening, and I am coming around to the idea. What is gold after all but a commonly agreed upon medium of value transfer, suitable because of scarcity and divisability, but other than that rather arbitrary too. If enough people decide that bitcoin is a good medium, then so it will be, and that momentum itself will keep it that way. And bitcoin does have a lot of attributes that make it suitable. There is a lot of money looking for a place to go and be safe (from loss and inflation). There are very few 'pure' ways to simply store that value, even gold is difficult to invest in, at least if you want actual ownership and not merely a promissory note. Bitcoin (or another cryptocurrency) could be one of these ways.
- the_gastropod 7y ago
  > ...because of scarcity and ... I have a hard time understanding digital scarcity. Bitcoins are scarce with respect to "the" Bitcoin network, but there's nothing preventing someone from forking or starting their own clone of the entire system. While that new chain would be missing all the historic transactions of the original, is that meaningful in any important way with respect to scarcity? The number of cells in an Excel spreadsheet are also finite, but we don't tend to impart value on them. And it's trivial to create a new spreadsheet with a whole new set of cells. What am I missing?
  - panarky 7y ago
    > nothing preventing someone from forking ... Bitcoin code has been forked thousands of times. Only a few forks survive today, and those are worth a small fraction of the original. That's because Bitcoin, like all money, is a social construct. It's an idea and belief shared among many people. Bitcoin, like all money, has no intrinsic value, but derives value from the network of people who find it useful. It's much more difficult to fork a network of people and shared beliefs than it is to fork the code. And I'll preempt the inevitable argument that dollars and renminbi are backed by the military, or by taxes, or by central banks, etc. That's all hogwash. Money isn't backed by anything other than shared belief and the promises we make to each other.
    - the_gastropod 7y ago
      Hah! I think you'll be surprised to hear: I agree with you! But my question was about Bitcoin's comparison to gold, specifically with respect to its scarcity.
- jfk13 7y ago
  So far, I'd say there's little evidence that bitcoin is a safe place to store large amounts of money.
codebolt 7y ago
The perceived value of gold as a store of value comes in part from the fact that humans have been using it as a means of trade/store of value across a vast span of cultures for many millenia. Bitcoin has been around for 8 years. With Bitcoin there is no guarantee that competing technologies won't spring up to replace it in the mid- to long-term. Gold will always be gold. Also, gold is shiny. Personally, I'd much rather have a gold bar in my safe, that I could take out and hold in my hands, than a memory stick with some Bitcoin on it.
- nicky0 7y ago
  Bitcoin (small c)
  - codebolt 7y ago
    Fixed
- deegles 7y ago
  This is a weakly held belief but I feel it’s risky to buy gold for long term holding because asteroid mining will render it cheap and abundant in my lifetime. :)
  - coldtea 7y ago
    Forget "asteroid mining" in our lifetime (and the next 2-3 as well).
    - coldtea 7y ago
      "But I want it to happen, so it must" --> downvote.
  - madshiva 7y ago
    It's like saying soon the gold will worth nothing because my alchemical guy will finally make the philosopher's stone. Asteroid mining will have a cost and therefore not will be render it totally cheap… or green. Bitcoin is neither green or worth anything, it's just in the head of people.
Nasrudith 7y ago
Reminds me of the snide economic distinction about gold. Unless you are doing work with gold as a raw material it isn't an investment but speculation. Even investing five hundred dollars for a day into Walmart is more investment as it enables short term production and utility creation of some sort - even if it is just getting a bag of potato chips at 3am. Gold or bitcoin in this case just sits there.

I used to dismiss this view, because it seems so impropable that an arbitrary digital asset would be able to fill a role like gold. But it does seem to be happening, and I am coming around to the idea. What is gold after all but a commonly agreed upon medium of value transfer, suitable because of scarcity and divisability, but other than that rather arbitrary too. If enough people decide that bitcoin is a good medium, then so it will be, and that momentum itself will keep it that way. And bitcoin does have a lot of attributes that make it suitable. There is a lot of money looking for a place to go and be safe (from loss and inflation). There are very few 'pure' ways to simply store that value, even gold is difficult to invest in, at least if you want actual ownership and not merely a promissory note. Bitcoin (or another cryptocurrency) could be one of these ways.

the_gastropod 7y ago
> ...because of scarcity and ... I have a hard time understanding digital scarcity. Bitcoins are scarce with respect to "the" Bitcoin network, but there's nothing preventing someone from forking or starting their own clone of the entire system. While that new chain would be missing all the historic transactions of the original, is that meaningful in any important way with respect to scarcity? The number of cells in an Excel spreadsheet are also finite, but we don't tend to impart value on them. And it's trivial to create a new spreadsheet with a whole new set of cells. What am I missing?
- panarky 7y ago
  > nothing preventing someone from forking ... Bitcoin code has been forked thousands of times. Only a few forks survive today, and those are worth a small fraction of the original. That's because Bitcoin, like all money, is a social construct. It's an idea and belief shared among many people. Bitcoin, like all money, has no intrinsic value, but derives value from the network of people who find it useful. It's much more difficult to fork a network of people and shared beliefs than it is to fork the code. And I'll preempt the inevitable argument that dollars and renminbi are backed by the military, or by taxes, or by central banks, etc. That's all hogwash. Money isn't backed by anything other than shared belief and the promises we make to each other.
  - the_gastropod 7y ago
    Hah! I think you'll be surprised to hear: I agree with you! But my question was about Bitcoin's comparison to gold, specifically with respect to its scarcity.
jfk13 7y ago
So far, I'd say there's little evidence that bitcoin is a safe place to store large amounts of money.

codebolt 7y ago

The perceived value of gold as a store of value comes in part from the fact that humans have been using it as a means of trade/store of value across a vast span of cultures for many millenia. Bitcoin has been around for 8 years. With Bitcoin there is no guarantee that competing technologies won't spring up to replace it in the mid- to long-term. Gold will always be gold. Also, gold is shiny. Personally, I'd much rather have a gold bar in my safe, that I could take out and hold in my hands, than a memory stick with some Bitcoin on it.

nicky0 7y ago
Bitcoin (small c)
- codebolt 7y ago
  Fixed
deegles 7y ago
This is a weakly held belief but I feel it’s risky to buy gold for long term holding because asteroid mining will render it cheap and abundant in my lifetime. :)
- coldtea 7y ago
  Forget "asteroid mining" in our lifetime (and the next 2-3 as well).
  - coldtea 7y ago
    "But I want it to happen, so it must" --> downvote.
- madshiva 7y ago
  It's like saying soon the gold will worth nothing because my alchemical guy will finally make the philosopher's stone. Asteroid mining will have a cost and therefore not will be render it totally cheap… or green. Bitcoin is neither green or worth anything, it's just in the head of people.

Nasrudith 7y ago

Reminds me of the snide economic distinction about gold. Unless you are doing work with gold as a raw material it isn't an investment but speculation. Even investing five hundred dollars for a day into Walmart is more investment as it enables short term production and utility creation of some sort - even if it is just getting a bag of potato chips at 3am. Gold or bitcoin in this case just sits there.