Now, since the difficulty changes over time I could imagine that not being as high as people think (e.g. if mining companies abandon bitcoin for other currencies), but there is a real world equivalent to book value.
Call it Instachain or something.
If the history of technology is any indication it will become obsolete before becoming devalued as cryptofinance people move on to better scams / technology.
Where else, besides the crypto-currency market itself, is "wealth" being "printed"?
Fiat currencies may be inflationary but they're only used to price wealth not actually hold it. Actual wealth, unlike crypto-curency "wealth", is held in stocks/bonds/land/etc which are actual assets backed by some kind of economic activity or physical scarcity. Comparing "Bitcoin as a store of value" with fiat currencies is a strawman, you need to compare it with gold if that's what you want it for. If you want to compare Bitcoin to fiat currencies you need "Bitcoin as a means of transactions" and at that it's become terribly inefficient and underused compared to expectations.
Bitcoin is EXACTLY like land and stocks, except much, much, much more liquid and useful.
Starting replies like this is getting to be a theme online. It adds nothing to the discussion except make people argue in extreme and entrenched ways.
>"stocks/bonds/land/etc" are not actual assets backed by anything OTHER than scarcity.
I specifically said they were backed by scarcity (land) and by economic activity (stocks and bonds).
>Stocks have value almost exclusively due to capital appreciation. You don't get anything for owning non-dividend-paying stocks. And owning dividend paying stocks just means money is not being reinvested (notice that Berkshire Hathaway has never paid dividends out).
I have no idea what you're trying to say. Stocks generate value out of an economic activity. That's the value that underlies them. If the company then has enough opportunities to continuously reinvest or if it just gives up and returns value through share buybacks or dividends is not really important to the point that what makes stocks valuable is that the company has some form of economic activity. If you find a stock that doesn't have an underlying economic activity and is just driving up price through scarcity that's not a company it's a Ponzi scheme like Enron used to run.
>Bitcoin is EXACTLY like land and stocks, except much, much, much more liquid and useful.
Bitcoin is digital gold. Useful yes, but wow, you really think its value dwarfs the asset classes responsible for representing the available physical area of the planet and the current economic activity of the planet?
Bitcoin, however, seems to have no practical uses whatsoever.
I don't understand what you're arguing against. First there are plenty of stocks that do return dividends (or do stock buybacks which are equivalent). Second, pricing may be suboptimal, maybe non-dividend stocks should be worth less[1] but it's still pricing something. Bitcoin is just pricing digital gold.
You're also going into the pattern of taking a comment and very vehemently discussing a small part of it as if that's what's being discussed. The initial OP assertion was that somehow fiat currencies are "printing wealth" as if printing dollars is somehow printing wealth, it's not. You've then made an even more incredible assertion that Bitcoin is strictly better than land or stocks because it's more "liquid and useful". Care to explain that? Certainly you're not arguing that Bitcoin is more valuable than all the world's stocks/bonds and all the world's land? And certainly you don't think something that struggles to do enough transactions a day to sustain the current network is actually currently more liquid or useful to the world economy than the capital markets that handle several orders of magnitude more transactions and total value?
[1] Almost certainly not 0 but that's a totally different discussion not worth going into here.
Stock buybacks actually demonstrate my point. You only benefit from a buyback if they pay you more than what you paid for the share. Dividends are a separate issue as they apply to business being undertaken, and few people invest money based solely on dividend rate. IMO land as a speculative asset actually might the most appropriate comparison to Bitcoin.
At any rate, Bitcoin/Ethereum and others are fundamentally new asset classes, they are technologized money. They allow you to do things with value that were never possible before.
> At any rate, Bitcoin/Ethereum and others are fundamentally new asset classes, they are technologized money. They allow you to do things with value that were never possible before.
This is too breathless to be meaningful. Care to name a few actual uses? There's a long way still for cryptocurrencies to demonstrate they actually bring anything of value to the table. From what I've seen so far Bitcoin may be a slight improvement on gold (an asset that's mostly useless these days) and Ethereum may be a slight improvement on complex financial instruments (things that are often actively harmful). I may be completely wrong of course, time will tell.
Most people that evangelize cryptocurrencies would probably be a lot better served by reading up on the basics of investing and start accumulating traditional baskets of assets. There's a long way to go before cryptocurrencies are validated as actually useful and a lot of risk along the way.
It's not going to go to 0 ever, unless its replaced by another de facto crypto as the face of the entire industry.
It's a deflationary, uncontrolled currency in a world that prints wealth, its easy to see why people want to hold some money here.