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I believe the thinking behind Bitcoins being a good hedge is that there are some similarities between it and gold. I'm not saying that's true but I believe that

I believe the thinking behind Bitcoins being a good hedge is that there are some similarities between it and gold. I'm not saying that's true but I believe that's where the idea started from. They're both rare (arguably hard capped at some point) assets that have no (or little) inherent value and their price are based on the value people assign to them. There are gold critics like Warren Buffet who've argued that gold investing is pointless because, to paraphrase him, "You pay people to dig it out of the ground and refine it and then you pay more people to guard it and let it sit there." Despite critics like Buffet, gold has held its value and often goes up during a downturn. So I can see how Bitcoin proponents might draw the parallels between the two, including the same sort of critics, and thus reasoned if gold works as a hedge then Bitcoin might as well. There are also some overlap between gold people and Bitcoin proponents, especially in the early days of Bitcoins. My friends who were interested in Bitcoins in the early days were the same types who would buy gold as a store of value. Maybe it's from this early origin that the idea was passed down.

sgt101 4y ago
Gold has some uses beyond finance: - electronics - decoration/ornamentation - if you give it to some people, they will have sex with you This is 3 more uses than bitcoin.
- DeathArrow 4y ago
  2 more uses as some people would have had sex with you if you gave them bitcoins.
  - RivieraKid 4y ago
    3, because gold has this use too.
nonameiguess 4y ago
I think the key thing missing is that gold has a few thousand years of cultural inertia behind is since humans have used it as a store of value, show of ostentatious wealth, and cross-jurisdiction medium of exchange for about as long as we have records. It may not still be well-suited to that purpose, making Buffett right on the fundamentals, but it could take centuries for current practices to reconcile with that reality. Bitcoin, on the other hand, has none of that historical advantage working in its favor. It's more like discovering some new kind of volcanic rock that only exists in one place, can't be artificially manufactured, has no industrial applications, and isn't pretty when made into jewelry, but is guaranteed to stay rare, and trying to convince people they should treat it like gold.

sgt101 4y ago

Gold has some uses beyond finance: - electronics - decoration/ornamentation - if you give it to some people, they will have sex with you This is 3 more uses than bitcoin.

DeathArrow 4y ago
2 more uses as some people would have had sex with you if you gave them bitcoins.
- RivieraKid 4y ago
  3, because gold has this use too.

nonameiguess 4y ago

I think the key thing missing is that gold has a few thousand years of cultural inertia behind is since humans have used it as a store of value, show of ostentatious wealth, and cross-jurisdiction medium of exchange for about as long as we have records. It may not still be well-suited to that purpose, making Buffett right on the fundamentals, but it could take centuries for current practices to reconcile with that reality. Bitcoin, on the other hand, has none of that historical advantage working in its favor. It's more like discovering some new kind of volcanic rock that only exists in one place, can't be artificially manufactured, has no industrial applications, and isn't pretty when made into jewelry, but is guaranteed to stay rare, and trying to convince people they should treat it like gold.