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The purpose bitcoin holds is the same as gold, if it were impossible to mine more gold. Gold isn't a good investment, simply because gold miners keep making mo

The purpose bitcoin holds is the same as gold, if it were impossible to mine more gold. Gold isn't a good investment, simply because gold miners keep making more, devaluing your holdings. Bitcoins promise is that that cannot happen.

solumunus 2y ago
I don’t understand. There’s a finite amount of both gold and bitcoin right?
- Drakim 2y ago
  there is a finite amount of gold, but we don't know exactly how much that is, we could potentially find several big gold veins tomorrow and crash the gold market. There is a finite amount of Bitcoin, and the amount of Bitcoin that will be injected into the market is deterministic by algorithm. (Note that there are several old bitcoin wallets with "dead" bitcoins that could one day suddenly become active, which I suspect would have the same effect as finding a new goldmine)
  - brookst 2y ago
    But there are lower bounds on how much you can split gold. Part of its value is as a tangible stored value. Nobody will store 0.00001 ounce of gold because you’d be in danger of accidentally inhaling it. The numerator for Bitcoin has an upper limit, but the denominator does not; it is functionally infinitely divisible with no loss of value. This doesn’t negate the argument, but mitigates it some.
    - Drakim 2y ago
      What you are saying is just objectively wrong, Bitcoin has a lower limit for it's denominator, it even has a fancy name: "one satoshi"
- oniony 2y ago
  No, Bitcoin was designed to have a finite supply of approximately 21 million coins, after which the mined Bitcoin would be all there ever is in circulation*. This makes it a deflationary currency: your holdings should** become worth more over time due to the limited supply: as more people enter the market there are few coins to buy due to more people holding them and due to those that are inaccessible due to lost keys. So, in the early days, the people running Bitcoin miners originally earnt money both on the fees on the few transactions but also on minting new coins. The algorithm was designed such that "miners" would transition to earning revenue entirely on transaction fees once all the Bitcoin had been mined, by which point the economy should be up and running. In both cases this encourages them to actually run the proof-of-work nodes that provide the distributed ledger. * assuming there is no successful change to the algorithm, which would require concensus by those running the nodes. ** this assumes people want to buy it – that a better investment vehicle has not materialised – and that Bitcoin has not been outlawed or had cripling taxes applied to it. https://crypto.bi/deflationary/ https://crypto.bi/deflationary/
qgin 2y ago
At least presently, it trades mire correlated to all risk assets rather than a safety asset like gold.
killingtime74 2y ago
Naive person thinks bitcoin is finite. However realist realizes its been forked before and there's no guarantee it won't happen again, hence its not fixed. https://en.wikipedia.org/wiki/List_of_bitcoin_forks#Intended_hard_forks_splitting_the_cryptocurrency https://en.wikipedia.org/wiki/List_of_bitcoin_forks#Intended...
- thuridas 2y ago
  And new cryptos appear all the time. Ñ
- dns_snek 2y ago
  A prerequisite for a successful fork is community buy-in.
  - throw0101d 2y ago
    > A prerequisite for a successful fork is community buy-in. Or a nation state that can outspend you on compute (or seize your compute for "national security" reasons).
    - dns_snek 2y ago
      That wouldn't make for a successful fork, but it's likely to destroy the entire system outright.
suraci 2y ago
Gold is not meant for investment; it is meant for storing value. The key factor that distinguishes gold from Bitcoin is that it is used and reserved by sovereign nations. The only path through which Bitcoin could replace gold is if sovereign nations use and reserve it. When you buy gold, you are exchanging currency; when you buy Bitcoin, you are buying merchandise. It’s no different from buying limited-edition gorilla images. the world is formed by a society, not by a block chain btw > because gold miners keep making more, devaluing your holdings. do we live in the same world?
- londons_explore 2y ago
  > The key factor that distinguishes gold from Bitcoin is that it is used and reserved by sovereign nations. The US government holds ~200,000 bitcoins. Market value: $20,981,980,000 The US government holds 261,498,926 troy oz of gold. Market value: $11,041,059,957 So the US already has more 'value' in bitcoin than gold.
  - suraci 2y ago
    i'm really really doubt about the numbers by what i know, the US reserves the most golds in the world, could be even more if you count IMF's also but, once if the US reserve more btc than golds and use it for exchanges, surely and fastly, btc will become the new dollar, as soon as the US is still the hegemony
  - tzs 2y ago
    > The US government holds 261,498,926 troy oz of gold. Market value: $11,041,059,957 I think you may have gotten the wrong row when you looked up gold prices to calculate that value. That value divided by that quantity gives $37.88/oz. Prices that low have not been seen since around 1970. Today's price is around $2800/oz, giving a value of $732,196,992,800.
pjc50 2y ago
Cryptocurrency is not at all finite - people keep minting new tokens for new pump and dump schemes all the time.
tromp 2y ago
Capped supply is overrated: https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...

solumunus 2y ago

I don’t understand. There’s a finite amount of both gold and bitcoin right?

Drakim 2y ago
there is a finite amount of gold, but we don't know exactly how much that is, we could potentially find several big gold veins tomorrow and crash the gold market. There is a finite amount of Bitcoin, and the amount of Bitcoin that will be injected into the market is deterministic by algorithm. (Note that there are several old bitcoin wallets with "dead" bitcoins that could one day suddenly become active, which I suspect would have the same effect as finding a new goldmine)
- brookst 2y ago
  But there are lower bounds on how much you can split gold. Part of its value is as a tangible stored value. Nobody will store 0.00001 ounce of gold because you’d be in danger of accidentally inhaling it. The numerator for Bitcoin has an upper limit, but the denominator does not; it is functionally infinitely divisible with no loss of value. This doesn’t negate the argument, but mitigates it some.
  - Drakim 2y ago
    What you are saying is just objectively wrong, Bitcoin has a lower limit for it's denominator, it even has a fancy name: "one satoshi"
oniony 2y ago
No, Bitcoin was designed to have a finite supply of approximately 21 million coins, after which the mined Bitcoin would be all there ever is in circulation*. This makes it a deflationary currency: your holdings should** become worth more over time due to the limited supply: as more people enter the market there are few coins to buy due to more people holding them and due to those that are inaccessible due to lost keys. So, in the early days, the people running Bitcoin miners originally earnt money both on the fees on the few transactions but also on minting new coins. The algorithm was designed such that "miners" would transition to earning revenue entirely on transaction fees once all the Bitcoin had been mined, by which point the economy should be up and running. In both cases this encourages them to actually run the proof-of-work nodes that provide the distributed ledger. * assuming there is no successful change to the algorithm, which would require concensus by those running the nodes. ** this assumes people want to buy it – that a better investment vehicle has not materialised – and that Bitcoin has not been outlawed or had cripling taxes applied to it. https://crypto.bi/deflationary/ https://crypto.bi/deflationary/

qgin 2y ago

At least presently, it trades mire correlated to all risk assets rather than a safety asset like gold.

killingtime74 2y ago

Naive person thinks bitcoin is finite. However realist realizes its been forked before and there's no guarantee it won't happen again, hence its not fixed. https://en.wikipedia.org/wiki/List_of_bitcoin_forks#Intended_hard_forks_splitting_the_cryptocurrency https://en.wikipedia.org/wiki/List_of_bitcoin_forks#Intended...

thuridas 2y ago
And new cryptos appear all the time. Ñ
dns_snek 2y ago
A prerequisite for a successful fork is community buy-in.
- throw0101d 2y ago
  > A prerequisite for a successful fork is community buy-in. Or a nation state that can outspend you on compute (or seize your compute for "national security" reasons).
  - dns_snek 2y ago
    That wouldn't make for a successful fork, but it's likely to destroy the entire system outright.

suraci 2y ago

Gold is not meant for investment; it is meant for storing value. The key factor that distinguishes gold from Bitcoin is that it is used and reserved by sovereign nations. The only path through which Bitcoin could replace gold is if sovereign nations use and reserve it. When you buy gold, you are exchanging currency; when you buy Bitcoin, you are buying merchandise. It’s no different from buying limited-edition gorilla images. the world is formed by a society, not by a block chain btw > because gold miners keep making more, devaluing your holdings. do we live in the same world?

londons_explore 2y ago
> The key factor that distinguishes gold from Bitcoin is that it is used and reserved by sovereign nations. The US government holds ~200,000 bitcoins. Market value: $20,981,980,000 The US government holds 261,498,926 troy oz of gold. Market value: $11,041,059,957 So the US already has more 'value' in bitcoin than gold.
- suraci 2y ago
  i'm really really doubt about the numbers by what i know, the US reserves the most golds in the world, could be even more if you count IMF's also but, once if the US reserve more btc than golds and use it for exchanges, surely and fastly, btc will become the new dollar, as soon as the US is still the hegemony
- tzs 2y ago
  > The US government holds 261,498,926 troy oz of gold. Market value: $11,041,059,957 I think you may have gotten the wrong row when you looked up gold prices to calculate that value. That value divided by that quantity gives $37.88/oz. Prices that low have not been seen since around 1970. Today's price is around $2800/oz, giving a value of $732,196,992,800.

pjc50 2y ago

Cryptocurrency is not at all finite - people keep minting new tokens for new pump and dump schemes all the time.

tromp 2y ago

Capped supply is overrated: https://john-tromp.medium.com/a-case-for-using-soft-total-supply-1169a188d153 https://john-tromp.medium.com/a-case-for-using-soft-total-su...