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You could say the same thing about gold throughout much of history. The value of Bitcoin (and historically, gold) is in its stock-to-flow, its fungibility, its
by ogogmad 6y ago
You could say the same thing about gold throughout much of history. The value of Bitcoin (and historically, gold) is in its stock-to-flow, its fungibility, its divisibility, and so forth. Its use case is mainly as a potential store-of-value, and perhaps even as a medium of exchange.
- arcticbull 6y agoYes, the big difference is gold, once extracted, doesn't cost 0.5% of the entire world's electricity supply to perform 7 transactions per second, which also generate 98g of e-waste each. You can perform a practically unlimited number of transactions per second with gold. Either way, both aren't particularly useful as currency because rigid deflationary currency is bad. Deflation creates inequality, and preserves inequality over time. Rigid currencies are unable to respond to shocks. They are also unable to adapt to the addition of new market participants (births). Give me one good reason why your dollars that you earned in exchange for goods and services should be worth more tomorrow than they are today?
- bigiain 6y ago> You can perform a practically unlimited number of transactions per second with gold. But but but - there's a hard upper limit!!! There's barely 3x10^19 atoms in 1 gram of gold! /s (Obviously we could trade electrons, protons, and neutrons on a side chain to scale transactions up by almost 3 orders of magnitude...)
- arcticbull 6y agoTo be fair, we actually tried the side-chain model when the dollar was backed by gold :) the crypto folks are just speed-running the history of finance. I don't wanna spoil the surprise, but of course, it ended poorly.
- bigiain 6y agoI guess there's a good analogy connecting "floating the dollar" and "stable coins" somewhere. "These crypto coins are 1:1 backed with US Dollars! Except when we arbitrarily decide they aren't any more! Watch the invisible hand at work!!!"
- arcticbull 6y agoOr when international law enforcement decides they're not because 30% of the backing dollars are the proceeds of money laundering. Then you pretend it's fully backed anyways, raise an LEO just because, and move on because crypto. Ah, I do so love the future.
- gjs278 6y agooh no not my heckin electricity and e-waste. stop posting, you’re wasting even more electrons.
- mac_was 6y agoI would not agree, gold is material, and wnehenver in the world you go with a piece of gold you can easily sell it, you don't need computer , electricity and in the case of Armageddon if you survive you will still be able to buy food using gold afterwards.
- lalaland1125 6y agoGold has historically been a pretty bad investment over time compared to actual value generating assets: https://www.macrotrends.net/2608/gold-price-vs-stock-market-100-year-chart https://www.macrotrends.net/2608/gold-price-vs-stock-market-...