EPTBut it could also continue rising forever, and your scenario could happen. Bitcoin is a really strange thing, because it is not actually connected to anything real whatsoever. Even gold has some uses, bitcoin is a currency which is pretty shitty at being a currency, but which becomes more valuable because a lot of people think it will become more valuable.
Trading/Investing Thread - Page 65
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Simberto
Germany11626 Posts
But it could also continue rising forever, and your scenario could happen. Bitcoin is a really strange thing, because it is not actually connected to anything real whatsoever. Even gold has some uses, bitcoin is a currency which is pretty shitty at being a currency, but which becomes more valuable because a lot of people think it will become more valuable. | ||
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LegalLord
United States13779 Posts
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RvB
Netherlands6248 Posts
On February 15 2021 02:09 Uldridge wrote: Am I stupid for thinking a set amount of bitcoin is some kind of magic thing? If anything, instead of inflation, it'll just make a single bitcoin over time more and more valuable. You'll have scenario's where instead of now, where you'd need to pay 10000000 USD to buy a random car due to hyper inflation, you'll need to pay 0.000002 BTC to buy the same car. Or are prices to be stabilized at a certain point due to the fact of a set amount? The year is 2050, and to be a millionair, all you need is a singular bitcoin... Yes your intuition is correct. Due to the limited amount of bitcoin it'll be deflationary. It's also why bitcoin is useless as a currency since it encourages hoarding. Whether bitcoin will really become more valuable over time is impossible to say. It doesn't have many real world uses so it's value is mostly speculative. It's value could disappear as easily as it has risen. | ||
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L_Master
United States8017 Posts
On February 15 2021 02:09 Uldridge wrote: Am I stupid for thinking a set amount of bitcoin is some kind of magic thing? If anything, instead of inflation, it'll just make a single bitcoin over time more and more valuable. You'll have scenario's where instead of now, where you'd need to pay 10000000 USD to buy a random car due to hyper inflation, you'll need to pay 0.000002 BTC to buy the same car. Or are prices to be stabilized at a certain point due to the fact of a set amount? The year is 2050, and to be a millionair, all you need is a singular bitcoin... This is correct, at least in the mass adoption case. The number of BTC maps to a certain underlying amount of goods/services/energy. As this underlying amount of goods/energy increases then the value of one BTC increases (assuming large scale adoption). | ||
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L_Master
United States8017 Posts
On February 15 2021 02:26 Simberto wrote: The mechanism against that is that bitcoin does not actually do anything. It is valuable because people think it will become more valuable. This can theoretically keep going forever, but it can also just randomly crash and suddenly be worthless. But it could also continue rising forever, and your scenario could happen. Bitcoin is a really strange thing, because it is not actually connected to anything real whatsoever. Even gold has some uses, bitcoin is a currency which is pretty shitty at being a currency, but which becomes more valuable because a lot of people think it will become more valuable. In older times, when it became adopted gold had zero use. Only with industrial age did gold gain any sort of a use case. This holds true for diamonds, emeralds, etc. Things have value for one reason and one reason alone...people want them. In the event of an extinction level collapse event the value of gold would go to zero. All value would go to food, water, perhaps shelter, and other useful for survival items. With a little more prosperity, people start to care about other things. People started to care about gold both because governments started using it to take tokens, and because it was an ornament that was rare and symbol of wealth. Over time, value shifted heavily to "it's rare, and takes lots of effort and energy to get even small quantities of", and then finally we actually got a few use cases for gold in practical applications. Guess what else is a symbol of wealth, is the abstract representation of scarcity itself, and takes significant energy to get even a small quantity? Ah. BTC. But ultimately, most of golds value is because people desire it, and believe that it stores value well. And so, self fulfilling prophecy, it has stored value reasonably well. Now for BTC....its literally better at being gold than...well...gold. Its non inflationary, its highly secure and cannot be taken away from you the way gold could by a government or authority, it can be transmitted instantly and with no energy over massive distances, etc. Did I mention non-inflationary unlike gold? On a fundamental level BTC vastly trumps gold. The only question becomes one of psychology, which is basically something like "Will people eventually see this abstract concept the same as a 'thing' like gold that is easier to understand?". The answer is "probably, but who knows" with a side of "it doesn't matter because the smarter ones (which includes nearly all rich and institutions) will understand this, and they control 99% of the value in the world. BTC/Crypto can be a 300T asset class even if 99% of the people have no idea what it is. | ||
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Vivax
22089 Posts
On February 15 2021 05:34 L_Master wrote: This is correct, at least in the mass adoption case. The number of BTC maps to a certain underlying amount of goods/services/energy. As this underlying amount of goods/energy increases then the value of one BTC increases (assuming large scale adoption). I don't think it has any underlying. It's a tulip of modern times. Consume energy to complete a mathematical operation, there's your bitcoin. Then there's alt coins as well, so it isn't even a one of a kind thing. It's also unclear who the early buyers were, but looking at the hype probably not small fries. On February 15 2021 05:48 L_Master wrote: In older times, when it became adopted gold had zero use. Only with industrial age did gold gain any sort of a use case. This holds true for diamonds, emeralds, etc. Things have value for one reason and one reason alone...people want them. In the event of an extinction level collapse event the value of gold would go to zero. All value would go to food, water, perhaps shelter, and other useful for survival items. With a little more prosperity, people start to care about other things. People started to care about gold both because governments started using it to take tokens, and because it was an ornament that was rare and symbol of wealth. Over time, value shifted heavily to "it's rare, and takes lots of effort and energy to get even small quantities of", and then finally we actually got a few use cases for gold in practical applications. Guess what else is a symbol of wealth, is the abstract representation of scarcity itself, and takes significant energy to get even a small quantity? Ah. BTC. But ultimately, most of golds value is because people desire it, and believe that it stores value well. And so, self fulfilling prophecy, it has stored value reasonably well. Now for BTC....its literally better at being gold than...well...gold. Its non inflationary, its highly secure and cannot be taken away from you the way gold could by a government or authority, it can be transmitted instantly and with no energy over massive distances, etc. Did I mention non-inflationary unlike gold? On a fundamental level BTC vastly trumps gold. The only question becomes one of psychology, which is basically something like "Will people eventually see this abstract concept the same as a 'thing' like gold that is easier to understand?". The answer is "probably, but who knows" with a side of "it doesn't matter because the smarter ones (which includes nearly all rich and institutions) will understand this, and they control 99% of the value in the world. BTC/Crypto can be a 300T asset class even if 99% of the people have no idea what it is. The collapse argument is often used for gold but provided you have basic things and aren't a starving man with a bag of metal coins, why shouldn't they be viable for bartering? They'd be the next best thing over bartering with sacks of flour or something. | ||
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Vivax
22089 Posts
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micronesia
United States24740 Posts
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L_Master
United States8017 Posts
On February 15 2021 06:20 micronesia wrote: I don't understand cryptocurrency much and am staying away from it. However, the thing that concerns me is that there is nothing to stop people from making bitcoin#2. Who controls stuff like that? With gold, there is only so much gold in the ground, and so much that can be accessed over the next X years. First mover effects, network effects. Practicality is also an issue. BTC itself cant be changed without 51% of mining power opting for a fork. From a game theoretic incentive structure, there is no reason to make a significant fork like that. New cryptos can be made, but BTC has already won the SoV competition. Its possible that BTC is more analogous to MySpace than Facebook...but that's less likely than BTC = Facebook | ||
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L_Master
United States8017 Posts
On February 15 2021 06:01 Vivax wrote: I don't think it has any underlying. It's a tulip of modern times. Consume energy to complete a mathematical operation, there's your bitcoin. Then there's alt coins as well, so it isn't even a one of a kind thing. It's also unclear who the early buyers were, but looking at the hype probably not small fries. The collapse argument is often used for gold but provided you have basic things and aren't a starving man with a bag of metal coins, why shouldn't they be viable for bartering? They'd be the next best thing over bartering with sacks of flour or something. Society vs individual. If you're doing bad but lots of other people are OK, you might well take the gold knowing you can trade it for other things. If everybody is really struggling then everybody has immediate survival needs that they want to meet. Gold has no use to you when you're a day away from dying of thirst or havent eaten in days. Lots of people in this predicament means that nobody really wants gold. | ||
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L_Master
United States8017 Posts
On February 15 2021 06:01 Vivax wrote: I don't think it has any underlying. It's a tulip of modern times. Consume energy to complete a mathematical operation, there's your bitcoin. Then there's alt coins as well, so it isn't even a one of a kind thing. It's also unclear who the early buyers were, but looking at the hype probably not small fries. Yes, and gold is consumer energy to get a bar of (until recently) useless metal out of the ground. What I really want to clarify though is I'm NOT saying BTC has any underlying inherent value. Not at all. What I mean by the mapping concept is that money, fundamentally, is energy. It's a way of storing and channeling energy. So, if you look at say the US economy, there are a certain number of dollars that map to a certain amount of underlying goods/services/energy, and the (circulating) supply of those dollars mapping to those goods determines the purchasing power, the value. If you have the same amount of goods/services/energy consumption, and then circulating supply of the money increases by 100%, then the value of that money will fall by 100% (although not in a uniform matter, because inflation is not a scalar quantity, but rather a vector field). So in the hypothetical example above where BTC becomes the dominant asset for "SoV" category, then 21 million BTC will map towards the goods/services/energy of the entire world. If the world economy (goods/services/energy) grows, it still maps to the same 21 million BTC, and thus the purchasing power of BTC rises with time. ^ The above is what I mean by "underlying value". --------- Tulips, in the 1600s, had no more use than gold. They were a situationally rare collectors item, with some aesthetic value to most people. Very analogous to gold at that time. More fundamentally, I think the idea of intrinsic value is generally a silly one that is in constant flux over time. We can take various examples: - Most would say a computer has intrinsic value. If the world suddenly had an energy crisis and modern electrical infrastructure broke, would the computer have any value to anyone? Probably not. - Oil? Lots of people would say that has intrinsic value because it's a massive amount of stored energy. Transport you back 1,000 years with no modern technology and would your oil have any value? Probably not. Nobody had a structure or device to use it. The only thing in my mind that comes close to having intrinsic value are literal survival items: food, water, shelter in most climates, clothing in many climates. You can *probably* guarantee that in all situations those things have value. For all other items, its very easy to come up with situations where those things might not have value. The existence of numerous things with no obvious use case/inherent value that are nevertheless worth significant amounts of money should make it obvious that something doesn't need "intrinsic value" to have value. Tulips had significant value for a short period of time. After that period of time, people collectively decided they had almost no value. Other things, like gold, initially had no value; but conditions led to people deciding they had value and that value has been maintained over thousands of years. Moreover, there is an intelligence tax that happens here. The smarter you are, the more quickly and easily you recognize that Crypto (and specifcally BTC at the moment) is better at being gold than gold itself. In time, you explain this to others and they come to recognize this as well, until it becomes common knowledge with the smartest people having been the first to market. I understood the confusion in say....2015 or even 2018 about whether BTC = gold is correct or whether BTC = tulips is correct. I'd even argue it was still up for debate. That issue went from uncertain to strongly in favor of "BTC = gold" over the latter half of 2021. It started with MicroStrategy investing in September, then continued with Saylor's promotion to other institutions, and has become heavily solidified over the past 6 months with much of the upwards price pressure being driven by large institutional buyers. These are widely understood not to be speculative hedge fund investments, but corporations converting a portion of treasury assets or excess capital into BTC. Why? Because inflation is starting to pick up, the dollar is looking pretty fucked, interest rates are near 0%, the market is comically overinflated, gold doesn't give great returns and is inflationary, and that leaves you with.....BTC. If you're in the old room (dollars/fiat) and someone is sucking 15% of the air out per year you have two choices: 1) Stay in the room and face certain death (Savings/Bonds/Fiat) 2) Go through the strange, uncertain but promising door labeled Oxygen (BTC) I'll let you guess which choice many institutions are now making. | ||
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Vivax
22089 Posts
On February 15 2021 06:31 L_Master wrote: Society vs individual. If you're doing bad but lots of other people are OK, you might well take the gold knowing you can trade it for other things. If everybody is really struggling then everybody has immediate survival needs that they want to meet. Gold has no use to you when you're a day away from dying of thirst or havent eaten in days. Lots of people in this predicament means that nobody really wants gold. What else then? Everyone used precious metal coins historically, then they got replaced with promissory notes. The current currency isn't even equivalent to those. You can't just go to your central bank and turn it in for an equivalent. Maybe you think in terms of mad max style scenarios and even then, what would you store value in that you can carry easily and isn't easily produced after gasoline, water, food, weapons? When speaking of collapse I rather think in terms of market prices going bonkers for everyday things or having trouble finding things to buy (infl. vs deflation which we don't know what it's going to be) and nobody having any clue about the pricing of things they were used to. I'd have to go to a producer or middleman for the things I need and skip the step of paying with currency, offering something else in return. + Show Spoiler + On February 15 2021 07:06 L_Master wrote: Yes, and gold is consumer energy to get a bar of (until recently) useless metal out of the ground. What I really want to clarify though is I'm NOT saying BTC has any underlying inherent value. Not at all. What I mean by the mapping concept is that money, fundamentally, is energy. It's a way of storing and channeling energy. So, if you look at say the US economy, there are a certain number of dollars that map to a certain amount of underlying goods/services/energy, and the (circulating) supply of those dollars mapping to those goods determines the purchasing power, the value. If you have the same amount of goods/services/energy consumption, and then circulating supply of the money increases by 100%, then the value of that money will fall by 100% (although not in a uniform matter, because inflation is not a scalar quantity, but rather a vector field). So in the hypothetical example above where BTC becomes the dominant asset for "SoV" category, then 21 million BTC will map towards the goods/services/energy of the entire world. If the world economy (goods/services/energy) grows, it still maps to the same 21 million BTC, and thus the purchasing power of BTC rises with time. ^ The above is what I mean by "underlying value". --------- Tulips, in the 1600s, had no more use than gold. They were a situationally rare collectors item, with some aesthetic value to most people. Very analogous to gold at that time. More fundamentally, I think the idea of intrinsic value is generally a silly one that is in constant flux over time. We can take various examples: - Most would say a computer has intrinsic value. If the world suddenly had an energy crisis and modern electrical infrastructure broke, would the computer have any value to anyone? Probably not. - Oil? Lots of people would say that has intrinsic value because it's a massive amount of stored energy. Transport you back 1,000 years with no modern technology and would your oil have any value? Probably not. Nobody had a structure or device to use it. The only thing in my mind that comes close to having intrinsic value are literal survival items: food, water, shelter in most climates, clothing in many climates. You can *probably* guarantee that in all situations those things have value. For all other items, its very easy to come up with situations where those things might not have value. The existence of numerous things with no obvious use case/inherent value that are nevertheless worth significant amounts of money should make it obvious that something doesn't need "intrinsic value" to have value. Tulips had significant value for a short period of time. After that period of time, people collectively decided they had almost no value. Other things, like gold, initially had no value; but conditions led to people deciding they had value and that value has been maintained over thousands of years. Moreover, there is an intelligence tax that happens here. The smarter you are, the more quickly and easily you recognize that Crypto (and specifcally BTC at the moment) is better at being gold than gold itself. In time, you explain this to others and they come to recognize this as well, until it becomes common knowledge with the smartest people having been the first to market. I understood the confusion in say....2015 or even 2018 about whether BTC = gold is correct or whether BTC = tulips is correct. I'd even argue it was still up for debate. That issue went from uncertain to strongly in favor of "BTC = gold" over the latter half of 2021. It started with MicroStrategy investing in September, then continued with Saylor's promotion to other institutions, and has become heavily solidified over the past 6 months with much of the upwards price pressure being driven by large institutional buyers. These are widely understood not to be speculative hedge fund investments, but corporations converting a portion of treasury assets or excess capital into BTC. Why? Because inflation is starting to pick up, the dollar is looking pretty fucked, interest rates are near 0%, the market is comically overinflated, gold doesn't give great returns and is inflationary, and that leaves you with.....BTC. If you're in the old room (dollars/fiat) and someone is sucking 15% of the air out per year you have two choices: 1) Stay in the room and face certain death (Savings/Bonds/Fiat) 2) Go through the strange, uncertain but promising door labeled Oxygen (BTC) I'll let you guess which choice many institutions are now making. Gold is a guarantee that the store of value isn't something easily replicated, given by its natural limits. Bitcoin promises to do the same since it also has natural limits but it lacks being singular. If any other coin preceded bitcoin and were equally marketed, we'd probably be talking about that one instead. If bitcoin is established by convention, then it can be used as an equivalent to gold, but the question is, who were the early buyers? And why wouldn't it face the same obstacles of gold from when it was the backing of currency (which meant forced deflation when hitting the limits). | ||
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L_Master
United States8017 Posts
On February 15 2021 07:27 Vivax wrote: What else then? Everyone used precious metal coins historically, then they got replaced with promissory notes. The current currency isn't even equivalent to those. You can't just go to your central bank and turn it in for an equivalent. Maybe you think in terms of mad max style scenarios and even then, what would you store value in that you can carry easily and isn't easily produced after gasoline, water, food, weapons? When speaking of collapse I rather think in terms of market prices going bonkers for everyday things or having trouble finding things to buy (infl. vs deflation which we don't know what it's going to be) and nobody having any clue about the pricing of things they were used to. I'd have to go to a producer or middleman for the things I need and skip the step of paying with currency, offering something else in return. Yes, true collapse "Mad Max" type scenarios are likely the degree required for gold to cease having value to most people. In a true Mad Max scenario, I don't think you're worried about storing value, you're probably worried about surviving. Any extra energy you get, you're storing in water/food stockpiles/investing in crops/etc. Deflation? Under what world are you going to expand the monetary supply by 75% in a year, combined with less productivity and overall goods/services/energy and get deflation? The only way this happens is if people "HODL" money to an incredible, never before seen degree. The far more likely outcome is as the pandemic restrictions relax and things look more normal people start spending more and then the inflation really kicks in. In terms of collapse, people definitely don't have a clue where to put money right now, that's for sure. Dogecoin, pokemon/magic cards/cars/housing/stock price/GME/AMC all are up absurdely. Tons of money flowing that obviously has no clue where it wants to go. On February 15 2021 07:27 Vivax wrote: + Show Spoiler + On February 15 2021 07:06 L_Master wrote: Yes, and gold is consumer energy to get a bar of (until recently) useless metal out of the ground. What I really want to clarify though is I'm NOT saying BTC has any underlying inherent value. Not at all. What I mean by the mapping concept is that money, fundamentally, is energy. It's a way of storing and channeling energy. So, if you look at say the US economy, there are a certain number of dollars that map to a certain amount of underlying goods/services/energy, and the (circulating) supply of those dollars mapping to those goods determines the purchasing power, the value. If you have the same amount of goods/services/energy consumption, and then circulating supply of the money increases by 100%, then the value of that money will fall by 100% (although not in a uniform matter, because inflation is not a scalar quantity, but rather a vector field). So in the hypothetical example above where BTC becomes the dominant asset for "SoV" category, then 21 million BTC will map towards the goods/services/energy of the entire world. If the world economy (goods/services/energy) grows, it still maps to the same 21 million BTC, and thus the purchasing power of BTC rises with time. ^ The above is what I mean by "underlying value". --------- Tulips, in the 1600s, had no more use than gold. They were a situationally rare collectors item, with some aesthetic value to most people. Very analogous to gold at that time. More fundamentally, I think the idea of intrinsic value is generally a silly one that is in constant flux over time. We can take various examples: - Most would say a computer has intrinsic value. If the world suddenly had an energy crisis and modern electrical infrastructure broke, would the computer have any value to anyone? Probably not. - Oil? Lots of people would say that has intrinsic value because it's a massive amount of stored energy. Transport you back 1,000 years with no modern technology and would your oil have any value? Probably not. Nobody had a structure or device to use it. The only thing in my mind that comes close to having intrinsic value are literal survival items: food, water, shelter in most climates, clothing in many climates. You can *probably* guarantee that in all situations those things have value. For all other items, its very easy to come up with situations where those things might not have value. The existence of numerous things with no obvious use case/inherent value that are nevertheless worth significant amounts of money should make it obvious that something doesn't need "intrinsic value" to have value. Tulips had significant value for a short period of time. After that period of time, people collectively decided they had almost no value. Other things, like gold, initially had no value; but conditions led to people deciding they had value and that value has been maintained over thousands of years. Moreover, there is an intelligence tax that happens here. The smarter you are, the more quickly and easily you recognize that Crypto (and specifcally BTC at the moment) is better at being gold than gold itself. In time, you explain this to others and they come to recognize this as well, until it becomes common knowledge with the smartest people having been the first to market. I understood the confusion in say....2015 or even 2018 about whether BTC = gold is correct or whether BTC = tulips is correct. I'd even argue it was still up for debate. That issue went from uncertain to strongly in favor of "BTC = gold" over the latter half of 2021. It started with MicroStrategy investing in September, then continued with Saylor's promotion to other institutions, and has become heavily solidified over the past 6 months with much of the upwards price pressure being driven by large institutional buyers. These are widely understood not to be speculative hedge fund investments, but corporations converting a portion of treasury assets or excess capital into BTC. Why? Because inflation is starting to pick up, the dollar is looking pretty fucked, interest rates are near 0%, the market is comically overinflated, gold doesn't give great returns and is inflationary, and that leaves you with.....BTC. If you're in the old room (dollars/fiat) and someone is sucking 15% of the air out per year you have two choices: 1) Stay in the room and face certain death (Savings/Bonds/Fiat) 2) Go through the strange, uncertain but promising door labeled Oxygen (BTC) I'll let you guess which choice many institutions are now making. Gold is a guarantee that the store of value isn't something easily replicated, given by its natural limits. Bitcoin promises to do the same since it also has natural limits but it lacks being singular. If any other coin preceded bitcoin and were equally marketed, we'd probably be talking about that one instead. If bitcoin is established by convention, then it can be used as an equivalent to gold, but the question is, who were the early buyers? And why wouldn't it face the same obstacles of gold from when it was the backing of currency (which meant forced deflation when hitting the limits). Not if it didn't have the same properties of BTC. There have been hundreds of other coins, and in the category "Store of Value" BTC is the dominant winner over hundreds of evolutionary iterations. "Store of Value" happens to be by FAR the most valuable property of money, and is why BTC, and not others, has the greatest marketshare. It's possible another coin, with superior properties, could come along and replace BTC. This again is the "BTC = myspace" case, which is no the improbable case. BTC = Facebook is the more likely case. It's won out over hundreds of competitors over a span of a decade, and is continue to grow. It's also where ALL of the non-speculative institutional money is going because it's the "SoV" category winner. All of this capital and those investing have every incentive to ensure BTC remains as the category lead. A different coin rising to prominence in the SoV category is a HUGE threat to the argument that BTC = superior gold, and it likely to be stopped....in exactly the same manner a competitor to Amazon is unlikely to be allowed to exist. Obviously, none of this is guaranteed. BTC may not be the winner in 20 years. Risk exists in all things. However, if you asked me to give an intuitive sense of the probability, I'd say well over 70% that BTC remains the dominant "SoV" coin winner, and well over 30% that BTC ends up eating a significant fraction of the economy. | ||
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GoTuNk!
Chile4591 Posts
Some other common debunks: BTC is used for criminal activities. So is cash, are we going to stop using cash? BTC is only one for many digital coins. USD is one of many currencies, does it matter? | ||
{CC}StealthBlue
United States41117 Posts
On February 15 2021 08:31 GoTuNk! wrote: A point many people here seem to miss: the ONLY determinant of value is supply and demand, "production cost" "usefulness" and other metrics are completely worthless and irrelevant; their only use is as a proxy for supply and demand. Not long ago, we had oil with negative value remember? In Venezuela at various times water was more expensive than oil, etc. Some other common debunks: BTC is used for criminal activities. So is cash, are we going to stop using cash? BTC is only one for many digital coins. USD is one of many currencies, does it matter? According to this guy law enforcement/DA's would rather have criminals use BTC. Also you can pay taxes using BTC in Ohio and possibly soon other states as well. | ||
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L_Master
United States8017 Posts
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Acrofales
Spain18112 Posts
On February 15 2021 05:48 L_Master wrote: In older times, when it became adopted gold had zero use. Only with industrial age did gold gain any sort of a use case. This holds true for diamonds, emeralds, etc. Things have value for one reason and one reason alone...people want them. In the event of an extinction level collapse event the value of gold would go to zero. All value would go to food, water, perhaps shelter, and other useful for survival items. With a little more prosperity, people start to care about other things. People started to care about gold both because governments started using it to take tokens, and because it was an ornament that was rare and symbol of wealth. Over time, value shifted heavily to "it's rare, and takes lots of effort and energy to get even small quantities of", and then finally we actually got a few use cases for gold in practical applications. Guess what else is a symbol of wealth, is the abstract representation of scarcity itself, and takes significant energy to get even a small quantity? Ah. BTC. But ultimately, most of golds value is because people desire it, and believe that it stores value well. And so, self fulfilling prophecy, it has stored value reasonably well. Now for BTC....its literally better at being gold than...well...gold. Its non inflationary, its highly secure and cannot be taken away from you the way gold could by a government or authority, it can be transmitted instantly and with no energy over massive distances, etc. Did I mention non-inflationary unlike gold? On a fundamental level BTC vastly trumps gold. The only question becomes one of psychology, which is basically something like "Will people eventually see this abstract concept the same as a 'thing' like gold that is easier to understand?". The answer is "probably, but who knows" with a side of "it doesn't matter because the smarter ones (which includes nearly all rich and institutions) will understand this, and they control 99% of the value in the world. BTC/Crypto can be a 300T asset class even if 99% of the people have no idea what it is. Not true. Gold is pretty and shiny. It's also easy to shape, so primitive societies could easily make pretty things of it. The idea of gold underlying currencies while having no uses is nonsense, as gold was highly valued for being shiny and pretty long before it was used to underwrite various currencies. Precious stones are valuable for similar reasons. People pay top dollar for pretty, shiny things! Always have, and probably always will. Given that a Mad Max dystopia will still have people whose basic needs are met, there will still be a market for luxury items, and gold will remain precious. I don't see any reason why bitcoin should. | ||
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evilfatsh1t
Australia8763 Posts
On February 15 2021 07:54 L_Master wrote: Yes, true collapse "Mad Max" type scenarios are likely the degree required for gold to cease having value to most people. In a true Mad Max scenario, I don't think you're worried about storing value, you're probably worried about surviving. Any extra energy you get, you're storing in water/food stockpiles/investing in crops/etc. Deflation? Under what world are you going to expand the monetary supply by 75% in a year, combined with less productivity and overall goods/services/energy and get deflation? The only way this happens is if people "HODL" money to an incredible, never before seen degree. The far more likely outcome is as the pandemic restrictions relax and things look more normal people start spending more and then the inflation really kicks in. In terms of collapse, people definitely don't have a clue where to put money right now, that's for sure. Dogecoin, pokemon/magic cards/cars/housing/stock price/GME/AMC all are up absurdely. Tons of money flowing that obviously has no clue where it wants to go. Not if it didn't have the same properties of BTC. There have been hundreds of other coins, and in the category "Store of Value" BTC is the dominant winner over hundreds of evolutionary iterations. "Store of Value" happens to be by FAR the most valuable property of money, and is why BTC, and not others, has the greatest marketshare. It's possible another coin, with superior properties, could come along and replace BTC. This again is the "BTC = myspace" case, which is no the improbable case. BTC = Facebook is the more likely case. It's won out over hundreds of competitors over a span of a decade, and is continue to grow. It's also where ALL of the non-speculative institutional money is going because it's the "SoV" category winner. All of this capital and those investing have every incentive to ensure BTC remains as the category lead. A different coin rising to prominence in the SoV category is a HUGE threat to the argument that BTC = superior gold, and it likely to be stopped....in exactly the same manner a competitor to Amazon is unlikely to be allowed to exist. Obviously, none of this is guaranteed. BTC may not be the winner in 20 years. Risk exists in all things. However, if you asked me to give an intuitive sense of the probability, I'd say well over 70% that BTC remains the dominant "SoV" coin winner, and well over 30% that BTC ends up eating a significant fraction of the economy. i dunno why you keep arguing that bitcoin is a good store of value. it just isnt. looking at the past few years as a trend and equating that to bitcoin being a good store of value is a foolish analysis. elon musk could literally tweet "bitcoin is worthless! stop investing!" and bitcoins price would plummet like a rock. with that kind of volatility theres no way anyone could legitimately think its a solid store of value. if you invest in bitcoin now because you dont know where to put your cash, it is still no different to gambling since youre taking the odds that people are dumb enough to think bitcoin is valuable (although i would admit those odds are pretty good). your comparison of bitcoin to gold is also absurd. the implication that gold doesnt have intrinsic value is incorrect and its also one of the key factors in why bitcoin cannot be a good store of value. bitcoin is taken over the other coins simply because it was the first cryptocurrency. the most well known. the "original". | ||
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Silvanel
Poland4733 Posts
Is the quantum computing an existential threat to all current cryptocurrencies? I mean it seems that once someone can use quantum computers to mine crypto they could generate vast amount of new coins in very short time and then exploit/crush the market if they so desire. | ||
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Salazarz
Korea (South)2591 Posts
On February 15 2021 21:10 Silvanel wrote: I dont know much about bitcoin. I have a question though, hope one of You guys know the answer. Is the quantum computing an existential threat to all current cryptocurrencies? I mean it seems that once someone can use quantum computers to mine crypto they could generate vast amount of new coins in very short time and then exploit/crush the market if they so desire. It's one of those things that could happen in theory, but realistically the probability of someone coming up with a quantum computer capable of doing something like this while also keeping that technology in secret long enough to use it before people figure out how to guard their shit against it is basically zero. That is, of course, if we're just talking about major, actively mined & developed projects. Stuff like BitcoinGold and Ethereum Classic has actually been 'taken over' a few times by some folks just leasing computing power through AWS / Google, which is pretty hilarious. | ||
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