If there's a total internet && computer && electricity apocalypse, a physical barter exchange with gold is more trustless than bitcoin. You can still transact bitcoin but there's trust involved.
Advantages of Bitcoin over gold:
No trusted third party (If you're moving sizable sums of gold, you're doing it with a trusted third party[TTP))
99.99226%[1] transaction uptime (Your TTP keep business hours)
No countries win the gold-geography lottery (Your country that has no gold reserves can still accumulate)
Instantly assay the value (gold takes time)
You can use latent renewable energy to mine bitcoin (the way that miners remain profitable is by using cheap hydro power that would be wasted if not consumed) No need to blow up mountains to sift for gold.
Bitcoin is programmable value (People in places without functioning judicial/commercial systems can create contracts with each other)
You cannot practically bring more bitcoin to market if the price increases (The price of gold dictates which gold fields are profitable to produce)
Most importantly, it separates money that citizens use and the onus of financial obligations that the oligopoly (Banker's bailout 2008) and political class (Endless war) place on citizens.
Moreover, you fail to account for human nature. I'd be shocked if bribes have not already passed hands, to allow for use of electricity for bitcoin mining near hydro power in remote areas.
Bitcoin as of now, is by volume a mechanism for letting privileged people in China shift their wealth (including Face) from resources in China to somewhere outside of China, with Bitcoin as a proxy. All the while ignoring externalities.
All the other rosy bitcoin has potential and so on, may be true, but please, look at what it is right now and say with a straight face that it's great. What is it, 90% of hash rate in China?
Edit: the bitcoin block reward is irrelevant. When more value is being parked in bitcoin, the transaction fees are going to go up to match the lost rewards. And people will pay.
1) Has been used for millennia. Bitcoin was invented ten years ago.
2) Accepted as valuable by most of human population. Bitcoin mostly as valuable within internet echo bubbles.
3) Although price fluctuates, it's more stable than that of bitcoin, thus better suited as store of value.
4) Has applications for industrial uses or for jewelry, guaranteeing that your gold retains at least a base value. Same cannot be said of prime number data structures.
5) Doesn't corrode and doesn't depend upon hardware or storage media to be working.
I'm not saying that people should hoard gold, just that bitcoin is a pretty poor substitute.
And, BTW:
> No countries win the gold-geography lottery (Your country that has no gold reserves can still accumulate)
Pop quiz: the population of Germany is roughly on par with the population of The Democratic Republic of Congo. Do the citizens of the two countries currently hold the same amount of bitcoin? If not, how come?
Price fluctuations are not what you care about with a store of value. What you care about is the elasticity of supply with respect to price. If the market price of gold increases, the production of it will increase (though to a lesser degree of other commodities). Bitcoin's supply curve is programmed with time as the only input. This means that no matter the change in price, supply cannot increase. This is a coup de grâce against every other existing store of value.
>4) Has applications for industrial uses or for jewelry, guaranteeing that your gold retains at least a base value. Same cannot be said of prime number data structures.
You don't want a store of value to have a myriad of other uses because those uses influence the price of the store of value. Say that 'Beautanium' becomes a more popular substance use for jewelry. Now Gold loses value. The only metric you care about in a store of value is the change in supply vs the available supply. This is Bitcoin's killer app, This is why it has value.
Yet the total amount of gold on this planet is finite, and as the millennia have passed, it has become increasingly expensive to dig it out of the ground. These are the same properties that people laud in bitcoin.
> Bitcoin's supply curve is programmed with time as the only input
As far as I am informed, bitcoin mining farms also tend to be connected to the power grid. May be just to keep the soft drink vending machine running. Dunno.
> This is a coup de grâce against every other existing store of value.
Limited supply is by no means unique to bitcoin. Gold and real estate share the same properties.
>> Bitcoin's supply curve is programmed with time as the only input
>As far as I am informed, bitcoin mining farms also tend to be connected to the power grid.
The electric grid has no influence on the supply curve of Bitcoin. Do you accept the fact that time is the only input for the supply function? It does not matter if there is one miner producing bitcoin or if bitcoin's price is $1 or $1MM dollars the same amount of bitcoins are produced.
>Limited supply is by no means unique to bitcoin.
Again seems like you completely misunderstand the difference between scarcity (limited supply) and controlled supply. There's a finite amount of water on the planet (because there's a finite amount of hydrogen and oxygen on Earth) too, does that mean water would make for good money? No because water is easily synthesized from other elements. It has a very multivariable supply function.
Difficulty readjustment mitigates long term influence of electriciry market on Bitcoin supply curve, but doesn't prevent the current prices from short-term influences
> Do you accept the fact that time is the only input for the supply function?
No.
> It does not matter if there is one miner producing bitcoin or if bitcoin's price is $1 or $1MM dollars the same amount of bitcoins are produced.
First, this isn't true over short terms, though difficulty adjustment means it should be approximately true with a steady state allocation of mining resources over the long term.
Second, though, supply isn't production caapcity, it's the mapping of price to number of units sold.
>No.
Do you accept that the following line is nominally linear? https://blockchain.info/charts/total-bitcoins?timespan=1year
If you do, then you must accept that time is the only input to the supply function.
If you don't, supply a source to show what variable you think is correlated to the change in bitcoin. The data indicates, time alone.
> If you do, then you must accept that time is the only input to the supply function.
Er, no, even assuming the omitted x-axis is linear, I don't. The other inputs being relatively constant or having variation which mostly cancelled out each other's effects over a one year period is indistinguishable, on such a chart, from time being the only input. (Plus, the implicit function to which time would hypothetically be the only input isn't a supply function, which is a mapping from price to quantity people are willing to sell.)
This is really interesting. Gold has physical uses for constructs that were developed during the industrial revolution. And as you say are well tested.
Ethereum or BCH, have information uses, for constructs that either have been developed in the last 20 years, or are being developed in this "information revolution" era.
I think we are about 20 years early to really see if a thing with physical properties will actually be more valuable than something with "informatic" properties. My bet is that the latter will win, given that materials sit on a lower level chain of complexity than information management.
Bitcoin corrodes?
You can encode your private keys in Gold if you want to.
And yeah, you can encode your private keys in gold, and I kind of think that everyone should do that, to keep future archaeologists puzzled :-P
It is difficult to compare the durability of gold and bitcoin. It does seem plausible, given the length of time we've been using it, that gold's value is completely related to its intrinsic properties and difficulty of mining.
Bitcoin can't possibly be valued on its intrinsic properties, because I can fork the entire technical edifice, start a new blockchain called it Bitcoin+1, and the fork will have no value vs the original.
Combined with a passphrase, it also means your money can't be stolen if your house is burgled. Gold would be a sitting duck in this case.
If you're using a computer, its hardware and software stack consist of one or more trusted third parties.
Although it's an interesting thought-experiment to compare the risks!
It means when governments want to borrow more money, their lenders actually need to have the liquidity available and can't just magic it out of thin air.
> You can use latent renewable energy to mine bitcoin (the way that miners remain profitable is by using cheap hydro power that would be wasted if not consumed) No need to blow up mountains to sift for gold.
... you do realize that this is a contradiction, right?
i mean yeah, its technically no longer a literal gold mine, but renewable energy sources where you can place power plants such as your mentioned hydro power aren't that abundant.
For what that's worth.
Some time ago I wrote an essay on proof of work and gold: https://medium.com/@zby/proof-of-work-8d8265def194
If something is worse than the problem currently being discussed, then The problem currently being discussed isn't that important at all. In order for the statement "A is not as bad as B," to suggest a fallacy there must be a fallacious conclusion such as: ignore A.[0]
You worked at a Bitcoin company and don't understand the value of proof of work? Being able to trustlessly settle shared stated across the entire globe is unproductive output? The globe spend billions of dollars each year blowing up mountains to sift for gold that then sit in central bank vaults to collect dust. At least bitcoin mining can absorb some of the curtailed renewable energy and make the payback on renewables faster.