4 ms·

I've always thought there's one important thing that's always omitted from this list: it's the only thing of it's kind. Yes it's true that we have other metals

by injb 6y ago

I've always thought there's one important thing that's always omitted from this list: it's the only thing of it's kind. Yes it's true that we have other metals that kind of have these characteristics, like silver, but there's always some key difference. Eg., there's a lot more silver, so you need a lot more of it than gold for a given value, and it can get pretty bulky. There's simply nothing else quite like gold. There seems to be just the right amount of it. So naturally I applied that reasoning to Bitcoin and concluded that it must be worth nothing in the long run - not because it doesn't tick all the usual boxes for a suitable currency, but because there's no limit to the number potential competitors, all of which tick the same boxes just as effectively. But so far I've been wrong. Really wrong! And I don't know why.

PeterWhittaker 6y ago
As have I, but our thoughts may matter less in the grand scheme. Cf https://www.fidelitydigitalassets.com/articles/aspirational-store-of-value https://www.fidelitydigitalassets.com/articles/aspirational-..., e.g.
Jakobeha 6y ago
Bitcoin does have one advantage: it was the first of its kind. Moreover, any other blockchain currency would have to go through the same value inflation as bitcoin: it makes sense to pick a currency where there are already a lot of coins, so that the price is more stable. If we can come up with a better currency (i.e. one that doesn't waste so much power), then Bitcoin might die. But I don't see it being replaced by some dogecoin, at least anytime soon.
osacial 6y ago
What this article is getting wrong is that gold is not used as currency in everyday use. You don't see anyone paying with small sized golden coins for one reason - gold is soft metal, that wears out easily. And gold is very recent currency in the history of humans - it became part of currency(with bunch of other metals), for those societies, that had metallurgy capabilities and could measure and cut metals and exchange them with other people - provided, they saw value in those metals(and valued work that has to be done to extract those metals). Currency by itself is abstract - it does not exist in nature(you can't see it in periodic table) and value is what we agree upon. If we can come to an agreement, that gold must cost something, then we can agree that also bitcoin costs something, as similar to gold, to make and maintain bitcoin, there must be some value put into it. There still exist stone currency in Pacific. They weight heavily - some of them are still used, even if they have sunk to the bottom of the ocean and no one can say if they exist, but people use them and have accepted that they still exist, so they are virtual coins, that are predating bitcoin by millenia. https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones Gold as such means absolutely nothing in modern economy - the main unifying currency is work, that has to be done to generate product. Digging out ore and extracting gold or other metals costs manhours - if the work is done by robots, then they still need to use energy+hours. In the end final product is valued by how much you need to put effort into getting it. Same applies to gold - go and mine gold from contacts of electric appliances and see how much of your time and equipment it is worth.

by injb 6y ago

PeterWhittaker 6y ago

As have I, but our thoughts may matter less in the grand scheme. Cf https://www.fidelitydigitalassets.com/articles/aspirational-store-of-value https://www.fidelitydigitalassets.com/articles/aspirational-..., e.g.

Jakobeha 6y ago

Bitcoin does have one advantage: it was the first of its kind. Moreover, any other blockchain currency would have to go through the same value inflation as bitcoin: it makes sense to pick a currency where there are already a lot of coins, so that the price is more stable. If we can come up with a better currency (i.e. one that doesn't waste so much power), then Bitcoin might die. But I don't see it being replaced by some dogecoin, at least anytime soon.

osacial 6y ago

What this article is getting wrong is that gold is not used as currency in everyday use. You don't see anyone paying with small sized golden coins for one reason - gold is soft metal, that wears out easily. And gold is very recent currency in the history of humans - it became part of currency(with bunch of other metals), for those societies, that had metallurgy capabilities and could measure and cut metals and exchange them with other people - provided, they saw value in those metals(and valued work that has to be done to extract those metals). Currency by itself is abstract - it does not exist in nature(you can't see it in periodic table) and value is what we agree upon. If we can come to an agreement, that gold must cost something, then we can agree that also bitcoin costs something, as similar to gold, to make and maintain bitcoin, there must be some value put into it. There still exist stone currency in Pacific. They weight heavily - some of them are still used, even if they have sunk to the bottom of the ocean and no one can say if they exist, but people use them and have accepted that they still exist, so they are virtual coins, that are predating bitcoin by millenia. https://en.wikipedia.org/wiki/Rai_stones https://en.wikipedia.org/wiki/Rai_stones Gold as such means absolutely nothing in modern economy - the main unifying currency is work, that has to be done to generate product. Digging out ore and extracting gold or other metals costs manhours - if the work is done by robots, then they still need to use energy+hours. In the end final product is valued by how much you need to put effort into getting it. Same applies to gold - go and mine gold from contacts of electric appliances and see how much of your time and equipment it is worth.