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Yeah, you are partly right. Prices depend on supply and demand. Gold is scarce, thus supply is low, and is useful (beautiful, can conduct electricity), thus de
by elcomet 6y ago
Yeah, you are partly right.
Prices depend on supply and demand.
Gold is scarce, thus supply is low, and is useful (beautiful, can conduct electricity), thus demand is high.
Bitcoin is scarce, yeah, as it requires a lot of energy to produce it. But it's not really useful for now, people buy it only for speculation. So demand exists, but it might fluctuate a lot.
- westwing 6y agoI would argue that gold also derives most of its value from speculation, not its physical properties. There are metals with even more favorable properties that are even scarcer, yet they are valued less. Platinum for instance was at one point considered the level "above gold", but it has since been overtaken. Gold simply is the better brand. It's the same for Bitcoin versus all other digital currencies. > But it's not really useful for now, people buy it only for speculation. Speculation itself is useful. Bypassing the financial system is useful. A price of $18,000 per unit of Bitcoin might sound ridiculous, but it needs to be considered that the market cap of Bitcoin, representing most of the world's cryptocurrency market, is only $200 billion. That is comparable to the assets of a medium-sized US bank.