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> gold is exactly the same Gold is similar. It's got more history. But it's more difficult to transact with. Bitcoin appears to be this generation's (late-boomer to early-millennial) gold or trading cards or what-have-you.
Is it more difficult to transact with? I can hand you a gold coin. But with bitcoin we need the internet and a whole network of miners.
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Is it more difficult to transact with? I can hand you a gold coin. But with bitcoin we need the internet and a whole network of miners.
How do you know that gold coin isn't filled with tungsten? With Bitcoin, it takes a handful of milliseconds to verify a transaction.
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There are practical limits to the supply of gold. There is no limit to the supply of crypto currency. That can be created out of thin air by anyone at any time.
> There is no limit to the supply of crypto currency the whole point of bitcoin — whether or not you believe it has a future —is that it allows for (and has) scarcity in a digital environment in which double-spending/scarcity were previously hard to enforce without an intermediary. there are only ever going to be 21 million bitcoin. there is a limit :)
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Your clone of Bitcoin wouldn't be a 'clone' any more than a lead bar is a 'clone' of gold. You might call it bitcoin all you want, but no actualy bitcoin software would be fooled. (You might trick some people, but fraud has existed long before computers). It's a lot less expensive to reliably distinguish a fraudulent bitcoin from a fraudulent goal bar. So even if you hold the position that there is no perfect scarcit…
My clone of bitcoin would have exactly the same properties as bitcoin. Your lead bar doesn't have any of the useful properties of gold (ductability, beauty, conductivity, etc).
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How is that valuable, aside from ones ability to speculate on how much people will want it in the future? As an aside, I agree with the other poster that there is no intrinsic scarcity to bitcoin, because anyone can create bitcoinN which are nearly identical to bitcoin. I say nearly because you can’t necessarily replicate the network, so the scarcity really depends on complicated emergent human behavior.
Of course you need to have demand for scarcity to be valuable. And I would argue that in the 10 years of it's existence so far, Bitcoin has proven that there is demand for it. Of course, you can create an identical coin on paper. Many have tried and their attempts have failed because like you said, the human behavior (aka the social aspect, network effects, psychology, etc) also have a big effect. In my opinion and f…
*If you read the article, it explains the demand was from the person behind Bitfinex printing a seemingly unlimited amount of Tether to steal BTC from other exchanges, so the demand is in effect a huge heist across all exchanges that supported Tether / USDT.
In Bitcoin's ideal use case, internet transactions - nearly all businesses have rejected BTC as a form of payment.
Stripe, the famous silicon valley payment processor discontinued Bitcoin support:
https://stripe.com/blog/ending-bitcoin-support
"At Stripe, we’ve long been excited about the possibilities of cryptocurrencies and the experimentation and innovation that’s come with them. In 2014, we became the first major payments company to support Bitcoin payments.
Our hope was that Bitcoin could become a universal, decentralized substrate for online transactions and help our customers enable buyers in places that had less credit card penetration or use cases where credit card fees were prohibitive.
Over the past year or two, as block size limits have been reached, Bitcoin has evolved to become better-suited to being an asset than being a means of exchange. Given the overall success that the Bitcoin community has achieved, it’s hard to quibble with the decisions that have been made along the way. (And we’re certainly happy to see any novel, ambitious project do so well.)
This has led to Bitcoin becoming less useful for payments, however. Transaction confirmation times have risen substantially; this, in turn, has led to an increase in the failure rate of transactions denominated in fiat currencies. (By the time the transaction is confirmed, fluctuations in Bitcoin price mean that it’s for the “wrong” amount.) Furthermore, fees have risen a great deal. For a regular Bitcoin transaction, a fee of tens of U.S. dollars is common, making Bitcoin transactions about as expensive as bank wires.
Because of this, we’ve seen the desire from our customers to accept Bitcoin decrease. And of the businesses that are accepting Bitcoin on Stripe, we’ve seen their revenues from Bitcoin decline substantially. Empirically, there are fewer and fewer use cases for which accepting or paying with Bitcoin makes sense.
Therefore, starting today, we are winding down support for Bitcoin payments. Over the next three months we will work with affected Stripe users to ensure a smooth transition before we stop processing Bitcoin transactions on April 23, 2018.
Despite this, we remain very optimistic about cryptocurrencies overall. There are a lot of efforts that we view as promising and that we can certainly imagine enabling support for in the future. We’re interested in what’s happening with Lightning and other proposals to enable faster payments. OmiseGO is an ambitious and clever proposal; more broadly, Ethereum continues to spawn many high-potential projects. We may add support for Stellar (to which we provided seed funding) if substantive use continues to grow. It’s possible that Bitcoin Cash, Litecoin, or another Bitcoin variant, will find a way to achieve significant popularity while keeping settlement times and transaction fees very low. Bitcoin itself may become viable for payments again in the future. And, of course, there’ll be more ideas and technologies in the years ahead.
So, we will continue to pay close attention to the ecosystem and to look for opportunities to help our customers by adding support for cryptocurrencies and new distributed protocols in the future."
Case study in Bitcoin as a payment system where even highly technically proficient users were unable to reliably use BTC to buy digital goods (Steam games):
https://arstechnica.com/gaming/2017/12/steam-drops-bitcoin-p...
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Bitcoin is a non-sovereign, hard-capped supply, global, immutable decentralized digital store of value. It’s an insurance policy against monetary and fiscal policy irresponsibility from governments and central banks globally. Bitcoin’s genesis block contains a reference to the 2008 financial crisis; Bitcoin is pretty clearly a response to what was happening October 2008, when the Bitcoin white paper was released. Iro…
> Ironically, the global economy is contracting [...] Where do you take that from? A Google search says that global real GDP is forecast to grow about 3% in 2019. Not great, but also not contracting. For comparison, global population is forecast to grow by about 1% this year. So we even get a bit of growth per capita.
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Your clone of Bitcoin wouldn't be a 'clone' any more than a lead bar is a 'clone' of gold. You might call it bitcoin all you want, but no actualy bitcoin software would be fooled. (You might trick some people, but fraud has existed long before computers). It's a lot less expensive to reliably distinguish a fraudulent bitcoin from a fraudulent goal bar. So even if you hold the position that there is no perfect scarcit…
If you want an element that acts like gold (doesn’t oxidize, high electrical conductivity, high thermal conductivity, malleable, etc.), you need gold. You can’t replace it with lead and get the same results. If you want a string of bits that acts like bitcoin, you can replace it with Xcoin, for many values of X. You can even create your own coin which does whatever you need. You may not be able to replicate the netwo…
So-- silver? Sure silver oxidizes a bit, but the oxide is conductive too and silver itself is more conductive than gold! :)
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> Ironically, the global economy is contracting [...] Where do you take that from? A Google search says that global real GDP is forecast to grow about 3% in 2019. Not great, but also not contracting. For comparison, global population is forecast to grow by about 1% this year. So we even get a bit of growth per capita.
The outlook isn’t good; certainly things in the US are slowing: https://www.washingtonpost.com/business/2019/10/30/us-slowdo...
Slower growth is still not a contraction. And the US is not the globe.
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> But I rather buy Bitcoin than WeWork shares (assuming they list). Depends on the price. Thanks to limited liability, WeWork share can never be worth less than zero. And just liquidating their existing office supplis is probably worth at least a few thousand dollars. But, of course, you'd have to pay off creditors first. If WeWork lists and doesn't go under, and assuming even a weak version of the efficient market h…
I find people's lack of knowledge about what makes Bitcoin valuable interesting. The reason Bitcoin is valuable is because the work required to create one is significantly harder than Fiat currencies and it is one of the only truly scarce assets in human history (hard cap). How much equipment do you need to counterfeit any fiat currency? Can you purchase the equipment for less than $10k? Yes, easy. How much equipment…
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That's not what money is. You're describing futures.
Bernard Lietar identified one of the modern properties of money as indeed speculation. 99% of forex is just that.
Outside of that world it's not speculation.