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There is a lot of work done in analyzing holding patterns. Would probably be interesting to see comparison to usage and price of gold as a store of value. For

There is a lot of work done in analyzing holding patterns. Would probably be interesting to see comparison to usage and price of gold as a store of value. For me, buying and holding seems to be legitimate usage. I guess that would count as "speculating". What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0?

Nursie 7y ago
> What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0? Do you expect to increase in price solely because there are a limited amount? There are many things which have that property, but are not good stores of value. Your ability to sell it later for more money is based on continuing demand. Unless there's some other use case, where is that demand going to come from? Isn't some of the value it is allegedly storing based on future expectations of utility?
- ohaideredevs 7y ago
  This is beating a dead horse and the typical argument, but the same can be said for gold. Its "intrinsic value" in terms of practical application is far lower than the market cost given the plentiful substitutes for high current / low heat transmission applications. I really do wonder why Bloomberg hates Bitcoing. If you read through a history of their articles, they REALLY hate it.
  - Nursie 7y ago
    I haven't mentioned intrinsic value once in my post, I agree it's not especially useful to talk about. I'm asking why BTC value should keep going up without some sort of demand beyond people buying because they expect it to go up? Or do you think that's enough?
    - ohaideredevs 7y ago
      If you can answer that for gold & silver, then there is a point in talking about this. If not, the answer is "It's a secure, easily transferable, deflationary store of value. Examples of it being used - Venezuela. Gold is not an option due to crime. The local currency is not an option due to massive inflation.
      - paulgb 7y ago
        I see Venezuela cited a lot as an example of Bitcoin adoption, but all I can find about its use is people mining as a way to arbitrage the subsidized electricity prices they get. Is there any evidence of widespread use of Bitcoin there as opposed to, say, USD?
        vkou 7y ago
        There's also no shortage of people claiming to be from Venezuela, asking for BTC donations.
      - Nursie 7y ago
        > If you can answer that for gold & silver, then there is a point in talking about this. You've had an answer for gold and silver and you've just said it's a store of value because it's a store of value. That's circular logic.
        ohaideredevs 7y ago
        Obviously "people keep buying it" is enough for the price to go up. People keep buying for the reasons already mentioned. I don't have much else to add to the conversation.
  - village-idiot 7y ago
    Gold’s special place in the western canon is really just a cultural artifact. Not only are there a variety of metals that could take its place as an investment vehicle (silver, platinum, and rhodium among others), but historically a variety of metals were used for currencies and transactions. Bronze, brass, lead, and salt were all once used as currency, but have long since just become “base” metals. On the opposite end of the spectrum you’ve got South American cultures that loved Gold for purely decorative purposes, but basically never considered it money. These cultures largely traded using barter or using a specific agricultural product as the unit of account, such as cacao beans.
    - Theodores 7y ago
      The Chinese were first to print money and the first to get into difficulties by printing too much. After this silver became the store of value and the currency. Hence the Opium Wars, the only way for UK/USA to get silver out of the Chinese economy. China had no interest in sub-standard Western goods and only wanted silver in exchange for their fine porcelain, silk and other goodies. Getting the whole nation on drugs and defending that trade with gunboats was a way of getting silver, silver being needed in the West for paying soldiers/mercenaries. Such proud history we have, enslaving India to get the opium, selling it in China and getting silver back to buy legit goods from China.
  - koonsolo 7y ago
    This reminds me of this funny video about "gold": https://www.youtube.com/watch?v=YHjYt6Jm5j8 https://www.youtube.com/watch?v=YHjYt6Jm5j8
- empath75 7y ago
  Why not create a cryptocurrency with a single coin? It should have infinite value :)
  - jraedisch 7y ago
    IMHO one should not accept alternative cryptocurrency, since they can be seen as a form of inflation, which is against Bitcoin's idea. 1 or 21 million does not really make a difference, as long as they are infinitely divisible.
defertoreptar 7y ago
> What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0? It depends on the price. If the price if above what it's "real" value will be (after factoring in later deflation), then you'd sell it.
- jraedisch 7y ago
  Yes, I would, provided there is another asset that I would expect to appreciate against it. Also there is a difference in short term and long term. In short term one might sell only to buy again after corrections, but this is risky/hard to time.
village-idiot 7y ago
For the sake of this discussion, let’s just focus on bitcoin as an investment vehicle. Rarity does not confer value. My toenail clippings are limited in quantity, but valueless. There has to be some sort of underlying demand before rarity gets to play a factor in the pricing equation. So for bitcoin, what has been the underlying value proposition to justify purchasing? A large part of it was that bitcoin is the future of money, and that once “mass adoption” began, the price would go up. Of course, bitcoin is a miserable failure of a currency. It doesn’t have properties that most consumers and vendors want. So this leaves us with “bitcoin has no inflation”, which is as I’ve mentioned above, not a good reason for anything to be valuable.
- ohaideredevs 7y ago
  "My toenail clippings are limited in quantity, but valueless." Indistinguishable from other toe-nail clippings, for which supply is not limited. Not easy to transport internationally quickly.
  - empath75 7y ago
    Bitcoin is indistinguishable from any of its various forks. Cryptocurrency tokens as a class are not rare.
    - ohaideredevs 7y ago
      It's distinguishable by being the first and most heavily invested in, as well as having the most infrastructure around it, especially institutional. Keep downvoting literally because you don't like facts.
    - Udik 7y ago
      True, I've been saying the same for a long time. However, forks are extremely susceptible to 50% attacks, the more so the more computing power concentrates on bitcoin. Anyway, the prices of all main cryptocurrencies go up and down together with very similar trends, so I guess the crypto inflation is already factored in the current price.
ineedasername 7y ago
Comparing to gold as a "buy & hold" store of value is only viable as a future possibility. Bitcoin has been too volatile to qualify as a store of value. If that changes, so too might its legitimacy for this use. But for the average investor/institution looking for a non-sovereign store of value, a year of stability isn't going to be sufficient. Maybe 5 years would convince, but then that puts bitcoin's legitimacy as a store of value at least 5 years out, and every time an exchange collapses or fraud or theft is revealed that sends the market into chaos, the clock is reset.
- jraedisch 7y ago
  I am ok with that.

Nursie 7y ago

> What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0? Do you expect to increase in price solely because there are a limited amount? There are many things which have that property, but are not good stores of value. Your ability to sell it later for more money is based on continuing demand. Unless there's some other use case, where is that demand going to come from? Isn't some of the value it is allegedly storing based on future expectations of utility?

ohaideredevs 7y ago
This is beating a dead horse and the typical argument, but the same can be said for gold. Its "intrinsic value" in terms of practical application is far lower than the market cost given the plentiful substitutes for high current / low heat transmission applications. I really do wonder why Bloomberg hates Bitcoing. If you read through a history of their articles, they REALLY hate it.
- Nursie 7y ago
  I haven't mentioned intrinsic value once in my post, I agree it's not especially useful to talk about. I'm asking why BTC value should keep going up without some sort of demand beyond people buying because they expect it to go up? Or do you think that's enough?
  - ohaideredevs 7y ago
    If you can answer that for gold & silver, then there is a point in talking about this. If not, the answer is "It's a secure, easily transferable, deflationary store of value. Examples of it being used - Venezuela. Gold is not an option due to crime. The local currency is not an option due to massive inflation.
    - paulgb 7y ago
      I see Venezuela cited a lot as an example of Bitcoin adoption, but all I can find about its use is people mining as a way to arbitrage the subsidized electricity prices they get. Is there any evidence of widespread use of Bitcoin there as opposed to, say, USD?
      - vkou 7y ago
        There's also no shortage of people claiming to be from Venezuela, asking for BTC donations.
    - Nursie 7y ago
      > If you can answer that for gold & silver, then there is a point in talking about this. You've had an answer for gold and silver and you've just said it's a store of value because it's a store of value. That's circular logic.
      - ohaideredevs 7y ago
        Obviously "people keep buying it" is enough for the price to go up. People keep buying for the reasons already mentioned. I don't have much else to add to the conversation.
- village-idiot 7y ago
  Gold’s special place in the western canon is really just a cultural artifact. Not only are there a variety of metals that could take its place as an investment vehicle (silver, platinum, and rhodium among others), but historically a variety of metals were used for currencies and transactions. Bronze, brass, lead, and salt were all once used as currency, but have long since just become “base” metals. On the opposite end of the spectrum you’ve got South American cultures that loved Gold for purely decorative purposes, but basically never considered it money. These cultures largely traded using barter or using a specific agricultural product as the unit of account, such as cacao beans.
  - Theodores 7y ago
    The Chinese were first to print money and the first to get into difficulties by printing too much. After this silver became the store of value and the currency. Hence the Opium Wars, the only way for UK/USA to get silver out of the Chinese economy. China had no interest in sub-standard Western goods and only wanted silver in exchange for their fine porcelain, silk and other goodies. Getting the whole nation on drugs and defending that trade with gunboats was a way of getting silver, silver being needed in the West for paying soldiers/mercenaries. Such proud history we have, enslaving India to get the opium, selling it in China and getting silver back to buy legit goods from China.
- koonsolo 7y ago
  This reminds me of this funny video about "gold": https://www.youtube.com/watch?v=YHjYt6Jm5j8 https://www.youtube.com/watch?v=YHjYt6Jm5j8
empath75 7y ago
Why not create a cryptocurrency with a single coin? It should have infinite value :)
- jraedisch 7y ago
  IMHO one should not accept alternative cryptocurrency, since they can be seen as a form of inflation, which is against Bitcoin's idea. 1 or 21 million does not really make a difference, as long as they are infinitely divisible.

defertoreptar 7y ago

> What else should you do with a store of value that you expect to appreciate in price because it has inflation going to 0? It depends on the price. If the price if above what it's "real" value will be (after factoring in later deflation), then you'd sell it.

jraedisch 7y ago
Yes, I would, provided there is another asset that I would expect to appreciate against it. Also there is a difference in short term and long term. In short term one might sell only to buy again after corrections, but this is risky/hard to time.

village-idiot 7y ago

For the sake of this discussion, let’s just focus on bitcoin as an investment vehicle. Rarity does not confer value. My toenail clippings are limited in quantity, but valueless. There has to be some sort of underlying demand before rarity gets to play a factor in the pricing equation. So for bitcoin, what has been the underlying value proposition to justify purchasing? A large part of it was that bitcoin is the future of money, and that once “mass adoption” began, the price would go up. Of course, bitcoin is a miserable failure of a currency. It doesn’t have properties that most consumers and vendors want. So this leaves us with “bitcoin has no inflation”, which is as I’ve mentioned above, not a good reason for anything to be valuable.

ohaideredevs 7y ago
"My toenail clippings are limited in quantity, but valueless." Indistinguishable from other toe-nail clippings, for which supply is not limited. Not easy to transport internationally quickly.
- empath75 7y ago
  Bitcoin is indistinguishable from any of its various forks. Cryptocurrency tokens as a class are not rare.
  - ohaideredevs 7y ago
    It's distinguishable by being the first and most heavily invested in, as well as having the most infrastructure around it, especially institutional. Keep downvoting literally because you don't like facts.
  - Udik 7y ago
    True, I've been saying the same for a long time. However, forks are extremely susceptible to 50% attacks, the more so the more computing power concentrates on bitcoin. Anyway, the prices of all main cryptocurrencies go up and down together with very similar trends, so I guess the crypto inflation is already factored in the current price.

ineedasername 7y ago

Comparing to gold as a "buy & hold" store of value is only viable as a future possibility. Bitcoin has been too volatile to qualify as a store of value. If that changes, so too might its legitimacy for this use. But for the average investor/institution looking for a non-sovereign store of value, a year of stability isn't going to be sufficient. Maybe 5 years would convince, but then that puts bitcoin's legitimacy as a store of value at least 5 years out, and every time an exchange collapses or fraud or theft is revealed that sends the market into chaos, the clock is reset.

jraedisch 7y ago
I am ok with that.