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There is something missing from this argument: How is Bitcoin a store of value?

dheera 6y ago
Flipping the question around, what makes it not a store of value? Much like gold, as long as the market looks at and goes "oh shiny!" and agrees collectively to keep its price up, it will function as a store of value. If one day I came up with a nuclear reactor that turned rocks into gold, maybe the market might drop the price of gold, and it would collapse just the same. And it will happen, just probably not in our lifetime.
chrisco255 6y ago
This argument is getting tiresome. What makes pork bellies a store of value? What makes shiny metal a store of value? What makes network effects of any kind a store of value? Liquidity is a value prop in and of itself. Trustlessness another. Network effects another. Continuity and network uptime another. Resilience and antifragility another. That's without even getting into the cross-border, censorship resistant, fully auditable, open source and international currency aspect of it.
- orbifold 6y ago
  Store of value == be able to bury it in a grave for 5000 years and be sure that it will have kept its value when someone finds it. I am almost certain that bitcoin wouldn’t survive societal collapse.
  - kaibee 6y ago
    I'm highly skeptical of any store of value surviving 5000 years from now. If the apocalypse happens, you can't eat gold.
    - scotty79 6y ago
      And if asteroid mining happens, gold might be as common (in the form of alloys) as steel. You can imagine someone burying at the beginning on iron age (which happened less than 5000 years ago) big chunk of this wondrous, rare and hard to work with material. And today we are making insanely huge buildings out of it.
- triceratops 6y ago
  > What makes pork bellies a store of value? You can eat them. If you salt them, they'll last a long while.
nly 6y ago
Nothing, putting aside that it's too volatile to be a 'good' store of value, the US could wipe out Bitcoin very quickly: 1. Introduce FedCoin - a compatible fork of Bitcoin pegged to the US dollar by the Fed. 2. Ban all US companies and citizens from buying, selling, exchanging, or trading in, alternative cryptocurrencies (such as Bitcoin). 3. Set the initial Fedcoin difficulty lower or comparable to Bitcoin, but peg the initial price higher in USD (the Fed can do this because they can print unlimited dollars). 4. Watch as every Bitcoin mining operation on the planet leaves Bitcoin in droves to mine FedCoin. 5. Watch as all but the diehard US holders of Bitcoin sell, causing the price to crash (further disincentivizing miners) This isn't entirely dissimilar to how the US destroyed the Gold market to hoover up all the Gold in the early 20th century.
- zelly 6y ago
  The government could also just announce they're imprisoning anyone who owns Bitcoin. Coinbase, Kraken, Gemini, Grayscale all shut down overnight. Everyone rushes for the exits and drives the price down below $1. If it is ever to return it would be as an illegal product. Now I don't think this is going to happen just because enough people in government own BTC at this point, but it's not impossible. And it has nothing to do with the resilience of the computing network. You could mine Bitcoin over TOR or I2P to keep the network alive but it won't matter.
- aeternum 6y ago
  Interesting scenario. Would miners in other countries mine FedCoin though? It seems unlikely that people in other countries would stop using Bitcoin entirely. To kill Bitcoin entirely the Fed would likely have to convince the FedCoin miners to periodically launch 51% attacks against the Bitcoin blockchain.
- deleted 6y ago
  [deleted]
- naveen99 6y ago
  No need to setup another fedcoin. They can just pump and dump bitcoin directly at will like they do with gold. they could short it to oblivion whenever they want, and accumulate as much as they want whenever they want.

Flipping the question around, what makes it not a store of value? Much like gold, as long as the market looks at and goes "oh shiny!" and agrees collectively to keep its price up, it will function as a store of value. If one day I came up with a nuclear reactor that turned rocks into gold, maybe the market might drop the price of gold, and it would collapse just the same. And it will happen, just probably not in our lifetime.

chrisco255 6y ago

This argument is getting tiresome. What makes pork bellies a store of value? What makes shiny metal a store of value? What makes network effects of any kind a store of value? Liquidity is a value prop in and of itself. Trustlessness another. Network effects another. Continuity and network uptime another. Resilience and antifragility another. That's without even getting into the cross-border, censorship resistant, fully auditable, open source and international currency aspect of it.

orbifold 6y ago
Store of value == be able to bury it in a grave for 5000 years and be sure that it will have kept its value when someone finds it. I am almost certain that bitcoin wouldn’t survive societal collapse.
- kaibee 6y ago
  I'm highly skeptical of any store of value surviving 5000 years from now. If the apocalypse happens, you can't eat gold.
  - scotty79 6y ago
    And if asteroid mining happens, gold might be as common (in the form of alloys) as steel. You can imagine someone burying at the beginning on iron age (which happened less than 5000 years ago) big chunk of this wondrous, rare and hard to work with material. And today we are making insanely huge buildings out of it.
triceratops 6y ago
> What makes pork bellies a store of value? You can eat them. If you salt them, they'll last a long while.

nly 6y ago

Nothing, putting aside that it's too volatile to be a 'good' store of value, the US could wipe out Bitcoin very quickly: 1. Introduce FedCoin - a compatible fork of Bitcoin pegged to the US dollar by the Fed. 2. Ban all US companies and citizens from buying, selling, exchanging, or trading in, alternative cryptocurrencies (such as Bitcoin). 3. Set the initial Fedcoin difficulty lower or comparable to Bitcoin, but peg the initial price higher in USD (the Fed can do this because they can print unlimited dollars). 4. Watch as every Bitcoin mining operation on the planet leaves Bitcoin in droves to mine FedCoin. 5. Watch as all but the diehard US holders of Bitcoin sell, causing the price to crash (further disincentivizing miners) This isn't entirely dissimilar to how the US destroyed the Gold market to hoover up all the Gold in the early 20th century.

zelly 6y ago
The government could also just announce they're imprisoning anyone who owns Bitcoin. Coinbase, Kraken, Gemini, Grayscale all shut down overnight. Everyone rushes for the exits and drives the price down below $1. If it is ever to return it would be as an illegal product. Now I don't think this is going to happen just because enough people in government own BTC at this point, but it's not impossible. And it has nothing to do with the resilience of the computing network. You could mine Bitcoin over TOR or I2P to keep the network alive but it won't matter.
aeternum 6y ago
Interesting scenario. Would miners in other countries mine FedCoin though? It seems unlikely that people in other countries would stop using Bitcoin entirely. To kill Bitcoin entirely the Fed would likely have to convince the FedCoin miners to periodically launch 51% attacks against the Bitcoin blockchain.
deleted 6y ago
[deleted]
naveen99 6y ago
No need to setup another fedcoin. They can just pump and dump bitcoin directly at will like they do with gold. they could short it to oblivion whenever they want, and accumulate as much as they want whenever they want.