Price is the interaction of supply and demand, and there is no particular reason to believe that people will be more willing to pay over $45k to update ledgers to indicate possession of a particular alphanumeric string in a couple of decades' time than they are now.
> there is no particular reason to believe that people will be more willing to pay over $45k to update ledgers to indicate possession of a particular alphanumeric string in a couple of decades' time than they are now
Absolutely. Nobody can know with certainty what will happen but if you compare Bitcoin with something like gold you immediately realize that Bitcoin is better in any possible way. There is literally no reason to think that Bitcoin won't replace gold in terms of market capitalization (except for the 7.5% actually used in manufacturing) [1].
[0] https://trends.google.com/trends/explore?date=today%205-y&ge...
[1] https://www.statista.com/statistics/299609/gold-demand-by-in...
Again, this is cargo-cult nonsense. Gold does not take the electricity resources of a large country to render it secure and make transactions possible. People cannot vote for a greater gold supply or fork gold, or create an alternative gold which lacks the need to use the electricity resources of a small country to secure it but is in every other respect functionally identical. Gold is pretty to look at and can be made into jewellery, not intrinsically worthless. Gold's price might be pushed higher than that intrinsic value by interest in its use as a store of value, but it's driven by millenia of desire to possess gold as a status symbol and currency substitute across a vast array of cultures, not a 12 year bull run propped up by counterfeit dollars and increasingly unrealistic claims that it will replace currency. There is literally no reason to believe that Bitcoin will ever 'replace gold in terms of market capitalization'
Except it does [0].
> Gold is pretty to look at and can be made into jewellery, not intrinsically worthless.
The first argument is laughable, the second is simply incorrect. Oil is intrinsically worthless. It's worth something only if you can turn it into fuel, plastic or some other product for which there is demand. Same goes for gold.
And although it's true that you can turn a piece of gold into a piece of jewelry that piece of jewelry will decrease in value over time unless it gains intangible value because of its history. Try buying a gold necklace and selling it the next day at the same value.
Nothing has "intrinsic" value. All value is relative.
[0] https://medium.com/@hillpot/bitcoin-vs-gold-which-hurts-the-....
That energy is used in production, not securing the existing stock of gold. With the very significant consequence for gold's "store of value" role that if environmental activists succeed in curtailing gold mining, gold owners would see their gold go up in value, not transactions becoming incredibly difficult and prone to fraud and a price crash. (But FWIW I'm not saying that gold mining to use as a "store of value" isn't also wasteful)
> It's worth something only if you can turn it into fuel, plastic or some other product for which there is demand. Same goes for gold.
I'm sorry to hear you find the aesthetic preferences of virtually every culture in history and the role they have played in promoting gold as a symbol of wealth laughable. You'd be surprised how much harder it is to enthuse them about the aesthetic properties of Bitcoins though.
And no, oil or gold is not "intrinsically worthless" because it is possible to use oil or gold for purposes other than exchange, and thus people value them for those use cases independently of beliefs about their future price.
> And although it's true that you can turn a piece of gold into a piece of jewelry that piece of jewelry will decrease in value over time unless it gains intangible value because of its history. Try buying a gold necklace and selling it the next day at the same value.
And yet gold necklaces of a given design are invariably more scarce in supply than Bitcoin! Almost like the demand side of the equation actually matters! Luckily, people do not buy gold necklaces solely because they believe gold necklaces will go up in price, and are not motivated to sell them as soon as they fear the price will fall in future. The same does not apply to Bitcoins, because unlike Bitcoins, people hold necklaces for the intrinsic pleasure of having a shiny necklace.
Safes and transportation equipment have to be built too. And we already have layer 2 infrastructure that minimizes the amount of energy spent to secure transactions on chain. It needs a lot of work, sure, but it's not unfeasible for Bitcoin to use a fraction of the energy used today, at some point.
Furthermore mining gold requires mining equipment to use whatever source of energy is nearby or ship expensive tanks of fuel and/or batteries. With Bitcoin you could set up a mining rig where there's a source of energy that would otherwise be left unused. Meaning we could be using a lot of renewable resources that would otherwise be wasted to create and exchange value.
> I'm sorry to hear you find the aesthetic preferences of virtually every culture in history and the role they have played in promoting gold as a symbol of wealth laughable.
I don't and you took what I said out of context. Of course aesthetic properties are important. But quartz is arguably "prettier" than gold in most cultures. Gold is scarcer. That's why only considering the aesthetics is laughable.
> And yet gold necklaces of a given design are invariably more scarce in supply than Bitcoin!
Gold necklaces of a certain brand. Not any custom designed necklace. It's an important distinction. A brand is a very real and important source of intangible value. And a brand can be related to a company's IP or to other less predictable events (think Banksy).
> because unlike Bitcoins, people hold necklaces for the intrinsic pleasure of having a shiny necklace.
You seem to be unaware of how many people hold Bitcoin just because they like doing so (think GME and WSB). A strong niche of Bitcoin holders has ties with libertarianism and, therefore, attributes a non-zero intangible value to it in terms of it being an instrument against totalitarianism and governments in general.
Because gold will be worthless and useless if it is not possible to continue using as much energy as Argentina on a daily basis to build and maintain safes and Securicor vans?
> Meaning we could be using a lot of renewable resources that would otherwise be wasted to create and exchange value.
Because the world is famously short of use cases and storage media for electrical power? As I already pointed out, none of the energy used to mine new gold is essential (or even remotely helpful) to securing and transacting with the existing gold supply, gold mining being energy use is something of a moot point when considering possible advantages of holding gold instead.
> I don't and you took what I said out of context Of course aesthetic properties are important. But quartz is arguably "prettier" than gold in most cultures. Gold is scarcer. That's why only considering the aesthetics is laughable.
At no point have I even hinted at considering only the aesthetics, and no good faith reading of my arguments would conclude I did. I did, after all, include the clause "price is the interaction of supply and demand" in my opening post.
I noted that aesthetics were a factor creating demand for gold independently from its perceived resale value. You summarily dismissed this as "laughable". There was nothing substantive for me to "take out of context", but I'm glad you now agree that the intrinsic aesthetic properties of gold are important.
> Gold necklaces of a certain brand. Not any custom designed necklace. It's an important distinction
Yes. I am aware that brands exist. Sometimes brands even produce limited editions so "we'll know exactly how many [necklaces] are in circulation 10 minutes, 10 days, 10 or even 100 years from now", but even this doesn't guarantee their gold necklaces retain their value. The fact that scarcity of particular designs often does not make them more useful as a store of value than the less scarce raw material supports my argument not yours. Second hand necklace preferences are fickle, and financial instrument preferences even more so.
> You seem to be unaware of how many people hold Bitcoin just because they like doing so (think GME and WSB)
How's GME performed as a store of value since WSB pumped? It's just as scarce as it was 10 days ago, but apparently not guaranteed to go up after all...
And come to think of it, the "terms of it being an instrument against totalitarianism and governments in general" are not independent from BTCs potential for future exchange use. Certainly neither as independent from future use nor as widespread as people taking pleasure from things' intrinsic shininess.
I was simply responding to what you said earlier:
> The same does not apply to Bitcoins, because unlike Bitcoins, people hold necklaces for the intrinsic pleasure of having a shiny necklace.
It does, instead, apply.
You clearly don't understand what "intrinsic value" means if you believe this. The very fact it can be fabricated into something of value gives it some intrinsic value.
That's a plain contradiction. Oil is valuable because there is demand for products manufactured with it. In a world where there's no demand for gasoline, plastic or any other derivative of oil the "intrinsic value" of oil is zero, which proves there is no such thing as intrinsic value that isn't relative to a market.
Just to be clear we're discussing commodities and not company stocks, for which there is a very specific definition of "intrinsic value", according to fundamental analysis at least.
I'm pretty sure you're the one who's confused, but ok.
Until then, it's potentially a great investment in today's climate (especially if you don't care about the climate).
Most things valuable nowadays are strings of characters. It's not the byte sequence that's valuable, it's what it represents. Bitcoin is, conceptually speaking, an asset that is orders of magnitude better than most existing financial instruments and commodities. The fact that it's implemented using bits instead of atoms is completely irrelevant.
I really don't understand this urge of breaking down anything digital into its fundamental units to try and diminish its value. It's the equivalent of evaluating anything in the physical world as "just a bunch of atoms".
Because in the good times, people think these things are great investments. But as soon as things go south they look at what they have from a different perspective. Something with some intrinsic value (e.g. a "bunch of atoms" that can be eaten or lived in) is likely to be much easier to rationalise holding on to in that scenario, rather than something that's only worth something due to consensus by a bunch of strangers.
And that's the risk - it doesn't matter if as an individual you see great potential. If everyone else disagrees, gets scared and sells, then BTC could be battered.
Also the "live in" is a big misconception. Real estate doesn't increase in value. What does is the land on top of which it sits. A house depreciates over time exactly like a car (prefabs on rented land are a great example of that).
The only question that matters is: is Bitcoin better than commodity X? Where X can be gold, silver, oil or whatever else. And if the answer is yes there's no reason to believe it wouldn't take over X in terms of market capitalization (and, therefore, value).
No. The only question that matters is will people collectively continue to agree that it's worth something, lacking any intrinsic value?
If interest rates go up and people need to call in their assets to repay their debts, what do you think will happen? Would people rather lose their houses or their bitcoins?
I think people will dump stocks and risky "assets" like BTC and take flight into cash with some percentage in traditional safe havens with a proven track record (like gold) until things settle down. This is exactly what happened a year ago. There's no reason in my mind to believe anything would change regarding BTC's status now - I think it'll be dumped like it was last year. It may recover faster (I'd certainly buy it for a heavy discount), but I just don't buy the "store of value", "digital gold" argument.
It's an early-stage speculative asset IMO - let's not pretend it's a stable, low-risk store of value.
> A house depreciates over time
Tell that to people unable to buy because house prices have shot up. Property can also generate a good rental income - yield obviously dependent on the price paid. BTC doesn't provide any such perpetuity.
1. There is no such thing as "intrinsic value" and I explained clearly why in a different reply to your comment.
2. What goes up is the value of land, not houses. If houses themselves were valuable movable homes would also increase in value. They don't. The reason why land goes up in value is that (residential) land is scarce.
3. Gold isn't a safe haven because of its track record (in fact gold is relatively volatile [0] and if you had bought gold in 1980 you'd have lost money today, adjusted to inflation), it's considered a safe haven because it's the only commodity that has a historically predictable stock to flow and can (and normally does) act as a hedge against inflation. Bitcoin does that and more.
> It's an early-stage speculative asset IMO
So was gold in its early stages as a store of value. So is any valuable company's stock in the first few months after IPO. Speculation is uncorrelated with the lack of fundamental valuable features.
At this point I'm not sure your intent is to try to understand more about Bitcoin (or economy, for that matter) but rather to force a narrative that isn't at all obvious, unlike what you're trying to imply. And I'm not saying you're wrong, rather that you're unable to corroborate your statements with data and facts.
"And for that reason, I'm out".
[0] https://www.macrotrends.net/1333/historical-gold-prices-100-...
If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd be grateful.
> Be kind. Don't be snarky.
> Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.
And I disagree with:
> You've crossed noticeably into that here [emphasis mine]
I've only done that in 2 comments towards the same user who also behaved similarly towards me. All my other comments have been polite, constructive and filled with references.
How about 5 years?
I can't give you an actual estimate of how long it will take for Bitcoin to lose its market share but I can confidently say it will take decades. At very least until it replaces a good chunk of gold's market cap.
Moreover, since technology is accelerating ever faster, five years from now is a lot longer than five years starting from 1980.
We could discuss the fact that BTC might be overpriced or underpriced, nobody really knows. But that it's going to go up in value (in terms of purchasing power) in the long term is, black swan events aside, almost a certainty because of its engineered stock to flow.
Scarcity is real whether it's physical or digital (as we've seen with art, collectibles or more recently NFTs). Gold is a good store of value because of historically predictable scarcity but it's not predictable with certainty. Bitcoin is. We'll know exactly how many bitcoins are in circulation 10 minutes, 10 days, 10 or even 100 years from now. If anything many will be lost, which will contribute to its scarcity.
Will Bitcoin be replaced by something else in the future? Almost certainly. But let's not forget that unbacked cash has been around for just half a century. Even if Bitcoin is replaced by something 50, 100 years from now that's plenty of time for a couple of generations to use it as a store of value (and payment system).