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> At the risk of sounding a big tinfoil... What you describe is how assets acquire monetary value: people start buying them not because they want them but beca
by Empact 6y ago
> At the risk of sounding a big tinfoil...
What you describe is how assets acquire monetary value: people start buying them not because they want them but because other people will want them. Then they don’t sell them because they know other people will want them in the future. Thus they develop a “monetary premium” from that additional demand, and become “stores of value” from the general market behavior.
The theory inside Bitcoin circles is that rich people have been buying up art, unproductive real estate, etc., not because they are good money but because they do not have access to good money, i.e. long-term deflationary, fungible, divisible, portable stores of value, because of our current regime of inflationary fiat money.
In seeking to preserve their wealth, they acquire collectibles, which then become monetary due to scarcity and expectation of future demand. It may be the very same impulse and process that led to the emergence of money in the first place, in the form of shells.
https://nakamotoinstitute.org/shelling-out/ https://nakamotoinstitute.org/shelling-out/
If Bitcoin demonstrates itself to be “better money,” it should absorb some of the monetary premium of these other goods, as people will have less need to allocate their resources into paintings no one will see and houses no one will live in.
- tinco 6y ago> Then they don’t sell them because they know other people will want them in the future. This artificially inflating demand for the item, with a very long delay or even obfuscated feedback. I agree that the value store is a (the only) viable use case for BTC. Although commodities in general check the same boxes without the awkwardness of Bitcoin. BTW when you say "better money" you mean for this specific use case right? Obviously BTC and cryptocurrency in general are not as good as regular money in general.
- Empact 6y ago> commodities in general check the same boxes without the awkwardness of Bitcoin To name a few properties, commodities can not be transferred anywhere in the world quickly and at low cost in a censor-less fashion, can not be transported in an immaterial form (e.g. a "brain wallet"). > when you say "better money" you mean for this specific use case right? I mean better at exhibiting the properties of money (originally articulated by Aristotle): durability, divisibility, portability, etc. Fiat fails at durability, through ongoing inflation. Art fails at: divisibility, etc. https://hangthebankers.com/aristotle-and-the-definition-of-money/ https://hangthebankers.com/aristotle-and-the-definition-of-m... https://omniequivalence.com/monetary-properties/ https://omniequivalence.com/monetary-properties/ https://www.economicsdiscussion.net/money/top-8-qualities-of-an-ideal-money-material/609 https://www.economicsdiscussion.net/money/top-8-qualities-of...