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It's become gold. Preferred by criminals, untraceable (gold is a single stable isotope, basically untraceable). A store of wealth. And you can't buy a pizza

It's become gold. Preferred by criminals, untraceable (gold is a single stable isotope, basically untraceable). A store of wealth. And you can't buy a pizza with gold, either, and there are tons of scammers who love gold (I remember, about Thailand, the scammers would conspire to get people's gold, a few would talk loudly about how jewels were going up, then someone else in your trip would just happen to mention, despite not wanting to mention it, that there was a great new jewelry offering discounted jewels, whatever, the point was they wanted the tourist to go to buy gold, then trade that gold for fake jewels, because then he couldn't get a refund).

Taniwha 5y ago
Gold also has a fatal flaw, there's only so much of it, building a currency based on gold (ie the US dollar on the gold standard) limits the size of the economy, it can't grow if you can't pay for stuff - it's why we left the gold standard. Bitcoin by design only has a fixed number of coins available, eventually the miners will have mined them all. It has the same limitation that gold has and basing an economy on it will stunt its growth.
- mixmastamyk 5y ago
  Are you saying economies grow by inflating their currency?
  - Taniwha 5y ago
    No, economies based on gold or bitcoin can ONLY grow by inflating their currency .... At the moment our economies grow because we can print more money ... and of course most national/reserve banks are careful to not print so much currency that inflation becomes an issue, just enough to cover the economic growth.
  - barrkel 5y ago
    Growth of the economy without growth of the money supply leads to deflation, which harms consumption and investment, because hanging on to your money becomes competitive with actively doing something with it. A small amount of inflation is an incentive to find productive uses for capital. Deflation rewards a kind of rentier class who own capital but don't do anything with it.
    - tastyfreeze 5y ago
      Perpetuating the fear of deflation is the greatest feat the Fed has ever pulled off. Deflation is good. Every wage earner becomes more wealthy as their rate of pay buys more. Sticky wages arent a problem with deflationary money. Hell, at least half the complaints about the modern economy are the result of inflation. But, no, deflation would utterly destroy the economy.
      - lmm 5y ago
        > Every wage earner becomes more wealthy as their rate of pay buys more. Income is not the same as wealth. Savers become wealthier, debtors (such as anyone with a mortgage) lose wealth. > Sticky wages arent a problem with deflationary money. Um, what? Your last sentence was all about how deflationary money guarantees wage earners increasing pay in real terms. That makes the sticky wages problem much worse.
      - arcticbull 5y ago
        Wages have kept pace with inflation over the last decades. This means they earned more currency units over time. If we had 0% inflation, they would earn the same number of units. With deflation they would earn fewer units. If you want to change the amount of wealth low-income earners have, stop focusing on the units. This is not JPow's fault, it's a job for congress - it's social and fiscal policy not monetary policy. This is just a quixotic quest against the wrong opponent. If you want to help low-income folks, advocate for unions (so labor can push back against capital), advocate for wealth taxes, higher marginal taxes for the rich, minimum wage indexed to inflation, a strong social safety net and national zoning laws to stop metros from preventing adding enough housing supply to meet demand. Things that would help.
        tastyfreeze 5y ago
        Wages have not kept pace with inflation at all. In real wealth terms everybody is poorer. https://www.forbes.com/sites/realspin/2013/10/09/measured-in-gold-the-story-of-american-wages-is-an-ugly-one/ https://www.forbes.com/sites/realspin/2013/10/09/measured-in...
- bufferoverflow 5y ago
  That's nonsense. Bitcoin is not limited to whole coins. The total number of satoshis is crazy big, more than the dollars in the world. Bitcoin is limited by the block size and the lack of working L2 solutions (lightning is permanently broken). But other currencies, like BCH don't have that problem, and can easily represent the whole US economy.
  - Taniwha 5y ago
    https://www.buybitcoinworldwide.com/how-many-bitcoins-are-there/ https://www.buybitcoinworldwide.com/how-many-bitcoins-are-th... 90% of all bitcoin ever have already been mined. If your solution to the limited number of bitcoins is rampant deflation you probably don't have a viable currency
    - bufferoverflow 5y ago
      Deflation is awesome. It's way better than inflation. It incentivizes you to not buy stupid junk that pollutes the world, you only buy the stuff you really need/want.
  - jodrellblank 5y ago
    There's 3x10^21 gold atoms in every gram. You might have difficulty measuring out two atoms of gold to change hands, but that's dwarfed by the difficulty in measuring out two Satoshis - given that they aren't a physical thing at all. So, if you can keep track of it with Satoshis, why couldn't you keep track of it with gold atoms? That is, if your position is "Bitcoin isn't limited like gold because of Satoshis" then the same argument works equally well for gold with atoms, doesn't it? That is, gold can't represent the entire economy because nobody would pay so much for a gram of gold, but why would they then pay that much for a quanity of the even less physical Bitcoin?
    - bufferoverflow 5y ago
      Your argument doesn't work at all, because there's no difficulty counting satoshis.
- mikedilger 5y ago
  It doesn't limit the size of the economy. It incentivises saving over investing, since the value of the currency tends to increase as the economy grows. Modern fiat currency is designed to disincentivise savings and incentivise investing, in order to supercharge economic growth. A counter-position from the Austrian/Chicago school is that supercharging growth drives malinvestment, and they can't be entirely wrong about that - I've seen tons of dumb money flow into dodgy companies during tech booms.
  - arcticbull 5y ago
    It incentivizes holding currency instead of making productive investments with your capital. Currency only has value when it moves, not lives under your grandma's mattress. Inflation incentivizes investment because you are going to lose 2% per annum if you don't. Fiat offers you the maximum flexibility because you can back your personal economy any way you want - if you want to back it with gold, just buy some. If you want to back it with crypto, bless your heart, buy some. This is a false narrative.
  - imtringued 5y ago
    The current economic system is in trouble because people save too much damn money, that money has to go somewhere, anywhere, otherwise you get unemployment and underemployment. Interest rates are low because everyone is saving, nobody is borrowing, nobody is investing.
  - api 5y ago
    Incentivizing investment is generally better from a national prosperity and power point of view in spite of the waste it creates. Wealth is a verb, not a noun. The wealth of nations is measured in how much they do, not how much they have. The US arguably defeated the USSR via looser monetary policy. China is now doing the same to the US.
graeme 5y ago
You’re going to need a bit more evidence on the “criminals love gold” point. Your thailand example just shows people will scam for small, valuable, fungible things. Gold didn’t have a rep as the hub of black market transactions before bitcoin.
- marcusae313 5y ago
  No it did not, but art did and still does. A lot of art in the future will have a non-fungible identity on chain. It's starting and will only grow rapidly.
- daniel-cussen 5y ago
  Exactly, scammers love small, valuable, fungible things, and gold and bitcoin are both.
lhl 5y ago
Companies like Chainalysis have unwound and track the large majority (probably 80%) of Bitcoin transactions. Bitcoin’s lack of fungibility and any semblance of transactional privacy is actually one of the arguments against its suitability as a currency. You can read some of their public reports here: https://blog.chainalysis.com/?tab=articles-tab https://blog.chainalysis.com/?tab=articles-tab
- qualudeheart 5y ago
  Yeah. I am actuoally an anti bitcoin kind of person because of that. There are technically much superior currencies.

Taniwha 5y ago

Gold also has a fatal flaw, there's only so much of it, building a currency based on gold (ie the US dollar on the gold standard) limits the size of the economy, it can't grow if you can't pay for stuff - it's why we left the gold standard. Bitcoin by design only has a fixed number of coins available, eventually the miners will have mined them all. It has the same limitation that gold has and basing an economy on it will stunt its growth.

mixmastamyk 5y ago
Are you saying economies grow by inflating their currency?
- Taniwha 5y ago
  No, economies based on gold or bitcoin can ONLY grow by inflating their currency .... At the moment our economies grow because we can print more money ... and of course most national/reserve banks are careful to not print so much currency that inflation becomes an issue, just enough to cover the economic growth.
- barrkel 5y ago
  Growth of the economy without growth of the money supply leads to deflation, which harms consumption and investment, because hanging on to your money becomes competitive with actively doing something with it. A small amount of inflation is an incentive to find productive uses for capital. Deflation rewards a kind of rentier class who own capital but don't do anything with it.
  - tastyfreeze 5y ago
    Perpetuating the fear of deflation is the greatest feat the Fed has ever pulled off. Deflation is good. Every wage earner becomes more wealthy as their rate of pay buys more. Sticky wages arent a problem with deflationary money. Hell, at least half the complaints about the modern economy are the result of inflation. But, no, deflation would utterly destroy the economy.
    - lmm 5y ago
      > Every wage earner becomes more wealthy as their rate of pay buys more. Income is not the same as wealth. Savers become wealthier, debtors (such as anyone with a mortgage) lose wealth. > Sticky wages arent a problem with deflationary money. Um, what? Your last sentence was all about how deflationary money guarantees wage earners increasing pay in real terms. That makes the sticky wages problem much worse.
    - arcticbull 5y ago
      Wages have kept pace with inflation over the last decades. This means they earned more currency units over time. If we had 0% inflation, they would earn the same number of units. With deflation they would earn fewer units. If you want to change the amount of wealth low-income earners have, stop focusing on the units. This is not JPow's fault, it's a job for congress - it's social and fiscal policy not monetary policy. This is just a quixotic quest against the wrong opponent. If you want to help low-income folks, advocate for unions (so labor can push back against capital), advocate for wealth taxes, higher marginal taxes for the rich, minimum wage indexed to inflation, a strong social safety net and national zoning laws to stop metros from preventing adding enough housing supply to meet demand. Things that would help.
      - tastyfreeze 5y ago
        Wages have not kept pace with inflation at all. In real wealth terms everybody is poorer. https://www.forbes.com/sites/realspin/2013/10/09/measured-in-gold-the-story-of-american-wages-is-an-ugly-one/ https://www.forbes.com/sites/realspin/2013/10/09/measured-in...
bufferoverflow 5y ago
That's nonsense. Bitcoin is not limited to whole coins. The total number of satoshis is crazy big, more than the dollars in the world. Bitcoin is limited by the block size and the lack of working L2 solutions (lightning is permanently broken). But other currencies, like BCH don't have that problem, and can easily represent the whole US economy.
- Taniwha 5y ago
  https://www.buybitcoinworldwide.com/how-many-bitcoins-are-there/ https://www.buybitcoinworldwide.com/how-many-bitcoins-are-th... 90% of all bitcoin ever have already been mined. If your solution to the limited number of bitcoins is rampant deflation you probably don't have a viable currency
  - bufferoverflow 5y ago
    Deflation is awesome. It's way better than inflation. It incentivizes you to not buy stupid junk that pollutes the world, you only buy the stuff you really need/want.
- jodrellblank 5y ago
  There's 3x10^21 gold atoms in every gram. You might have difficulty measuring out two atoms of gold to change hands, but that's dwarfed by the difficulty in measuring out two Satoshis - given that they aren't a physical thing at all. So, if you can keep track of it with Satoshis, why couldn't you keep track of it with gold atoms? That is, if your position is "Bitcoin isn't limited like gold because of Satoshis" then the same argument works equally well for gold with atoms, doesn't it? That is, gold can't represent the entire economy because nobody would pay so much for a gram of gold, but why would they then pay that much for a quanity of the even less physical Bitcoin?
  - bufferoverflow 5y ago
    Your argument doesn't work at all, because there's no difficulty counting satoshis.
mikedilger 5y ago
It doesn't limit the size of the economy. It incentivises saving over investing, since the value of the currency tends to increase as the economy grows. Modern fiat currency is designed to disincentivise savings and incentivise investing, in order to supercharge economic growth. A counter-position from the Austrian/Chicago school is that supercharging growth drives malinvestment, and they can't be entirely wrong about that - I've seen tons of dumb money flow into dodgy companies during tech booms.
- arcticbull 5y ago
  It incentivizes holding currency instead of making productive investments with your capital. Currency only has value when it moves, not lives under your grandma's mattress. Inflation incentivizes investment because you are going to lose 2% per annum if you don't. Fiat offers you the maximum flexibility because you can back your personal economy any way you want - if you want to back it with gold, just buy some. If you want to back it with crypto, bless your heart, buy some. This is a false narrative.
- imtringued 5y ago
  The current economic system is in trouble because people save too much damn money, that money has to go somewhere, anywhere, otherwise you get unemployment and underemployment. Interest rates are low because everyone is saving, nobody is borrowing, nobody is investing.
- api 5y ago
  Incentivizing investment is generally better from a national prosperity and power point of view in spite of the waste it creates. Wealth is a verb, not a noun. The wealth of nations is measured in how much they do, not how much they have. The US arguably defeated the USSR via looser monetary policy. China is now doing the same to the US.

graeme 5y ago

You’re going to need a bit more evidence on the “criminals love gold” point. Your thailand example just shows people will scam for small, valuable, fungible things. Gold didn’t have a rep as the hub of black market transactions before bitcoin.

marcusae313 5y ago
No it did not, but art did and still does. A lot of art in the future will have a non-fungible identity on chain. It's starting and will only grow rapidly.
daniel-cussen 5y ago
Exactly, scammers love small, valuable, fungible things, and gold and bitcoin are both.

lhl 5y ago

Companies like Chainalysis have unwound and track the large majority (probably 80%) of Bitcoin transactions. Bitcoin’s lack of fungibility and any semblance of transactional privacy is actually one of the arguments against its suitability as a currency. You can read some of their public reports here: https://blog.chainalysis.com/?tab=articles-tab https://blog.chainalysis.com/?tab=articles-tab

qualudeheart 5y ago
Yeah. I am actuoally an anti bitcoin kind of person because of that. There are technically much superior currencies.