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Big difference between making money on something and it having actual real world utility, and long run viability as anything other than speculative vehicle. "I

Big difference between making money on something and it having actual real world utility, and long run viability as anything other than speculative vehicle. "I made money so that proves me right" is a pretty weak argument, that could be said about any pyramid scheme. People who made money buying dotcom stocks in the late 90s or houses in the mid 2000s were "right" too, until they weren't. Things without intrinsic value tend not to hold their market value over the long term. I do think Bitcoin has some marginal value, e.g. for countries with hyperinflation and no capital markets, use as payment for illicit activities... But not very compelling overall. Still, gold is a close analogue. But there are important differences there.

MereInterest 5y ago
> Still, gold is a close analogue. But there are important differences there, still. The biggest difference is that gold does not require significant upkeep to maintain. Mining gold extracts a resource, which can then be used at low marginal cost. Running proof of work computations enables transactions to occur, and is rewarded as compensation. If the proof of work computations stop, then the reward can no longer be spent. This is why I refuse to use the term "mining", as it brings in a large number of incorrect assumptions of the process.
- adam_arthur 5y ago
  Yeah, didn't want to go into all the details in my original post. But over 50% of mined gold is actually used for industrial or jewelry purposes. Also you can't create "Gold 2.0" out of thin air. Or flash sell millions of ounces of physical gold tanking the price in a matter of minutes. Bitcoin is only valuable because it's called Bitcoin and has a cool origin story, yet the Blockchain mechanism backing it has been replicated quite exactly many times. There is power in shared belief, but something without a strong cushion of intrinsic value will inevitably get sold off when the hard times comes. Not that I'm big on gold for investing purposes...

MereInterest 5y ago

> Still, gold is a close analogue. But there are important differences there, still. The biggest difference is that gold does not require significant upkeep to maintain. Mining gold extracts a resource, which can then be used at low marginal cost. Running proof of work computations enables transactions to occur, and is rewarded as compensation. If the proof of work computations stop, then the reward can no longer be spent. This is why I refuse to use the term "mining", as it brings in a large number of incorrect assumptions of the process.

adam_arthur 5y ago
Yeah, didn't want to go into all the details in my original post. But over 50% of mined gold is actually used for industrial or jewelry purposes. Also you can't create "Gold 2.0" out of thin air. Or flash sell millions of ounces of physical gold tanking the price in a matter of minutes. Bitcoin is only valuable because it's called Bitcoin and has a cool origin story, yet the Blockchain mechanism backing it has been replicated quite exactly many times. There is power in shared belief, but something without a strong cushion of intrinsic value will inevitably get sold off when the hard times comes. Not that I'm big on gold for investing purposes...