I think he means the compelling aspect is its fixed monetary policy. Gold deposits can be discovered (Uganda) or asteroids mined. Governments actively change their monetary policy. But bitcoin, for the first time in history, sets monetary policy in stone and gives all participants perfect information (in the game theoretic sense). I'm not saying that's overall good or bad, but it certainly makes predicting the future easier!

> But bitcoin, for the first time in history, sets monetary policy in stone and gives all participants perfect information

This is as true as saying that the United States Department of Treasury sets the supply of dollars in stone. Bitcoin is as fixed as the relatively small number of parties who run the network want it to be. If enough of them wanted to fork it, remove the deflationary model, change their rewards, etc. most users would be dragged along for the ride because there’s no anchor.

What would be the shared motive for any of that tho? Like considering the requirements for forking (and the likely crash / loss of value) does that not present more of an anchor than most / all fiat systems which are regularly debased?

Say the mining rewards fall off as planned and electricity prices go up. What percentage of miners is going to stand up for purity of the original vision versus voting for them to make more money? As we’ve seen so many times already, wasting lots of resources doesn’t make cryptocurrency middlemen any less tempted to abuse their positions, there’s nothing like the democratic accountability which keeps most sovereign currencies more stable than Bitcoin, and every major holder knows that they’re holding the weakest fiat currency and will only profit if they cash out ahead of everyone else.

> But bitcoin, for the first time in history, sets monetary policy in stone

There’s nothing preventing Bitcoin miners from modifying the Bitcoin supply algorithm and inflation rate, except for their collective unwillingness to do so.

Bitcoin block rewards go down over time in Bitcoin terms—but so far the long term trend has been that the rewards have gone up in USD terms. We have never seen a sustained, long-term decline in the block reward in USD terms.

When we have seen short-term declines in the USD-denominated block reward, the hash rate has also declined—meaning a good number of miners have stopped mining.

What happens if the price of Bitcoin stagnates in the long term? Will miners still mine when the block reward is slashed again? Or will they decide to modify the algorithm to ensure that they remain profitable?

To change the algorithm, all three of miners, users, and nodes would have to agree to the change. If there is any disagreement, the network continues running under current consensus rules.

In fact, a majority of miners did try to strongarm a fork 5 years ago, and they failed, because the users did not agree. There was even been a book written about it. https://www.amazon.com/Blocksize-War-controls-Bitcoins-proto...

If they tried again, they would fail again -- literally nobody would agree to a fork whose purpose is to enrich miners at the users' expense.

While the block reward remains high in USD terms, I think you’re right with regards to the power balance. But if the reward falls low enough—which very well might happen, if the price of Bitcoin stagnates and if transaction fees stay low—then there won’t be enough miners to secure the network without some kind of change to the algorithm.

The Bitcoin Cash fork happened when prices were rising and the inflation rate was still high. What would the balance of power have been if the block reward were 1/16 what it was at that time? What if the only miners willing to stay in the network were trying to exploit it in some other way, because the block reward was insufficient an incentive?

In that kind of environment, both users and miners might start looking to make changes.

Isn't it that the less miners, the lower the difficulty therefore each miner that continues to mine will win the block reward more often because of less competition?

The security issue with less miners is the whole 51% attack, but even with a substantial drop in miners, it would still mean the attacker would need many thousands of nodes. Seems like that kind of energy and spend would be more profitable mining.

The problem is that if you stop increasing the supply, then you're relying entirely on transaction fees to reward miners.

But transaction fees are determined based on supply and demand for transactions, not based on how much value on the chain is secured by them.

These are only tangentially related, and the strategy of 'store of value' makes them even less well coupled.

Unless there is high demand for transacting, then the economic pressure will be for the cost of attacking the chain to come down, and double spending the value stored on the chain will increasingly become more appealing than transaction fees.

The current equilibrium relies on the supply increasing.

51% attacker has the ability to block any transaction. The whole selling point of Bitcoin is that nobody can do that.

> The whole selling point of Bitcoin is that nobody can do that.

It is absolutely possible but not practical. The selling point of bitcoin in this regard is that the work needed to take over the network is relative to the size of the network.

You can 51% a small shitcoin all day. It might cost you $50,000 to do it and now you control a coin that has become worthless because it got hacked by you.

It's not practical right now, but if block reward and bitcoin price go way down then what are the options? Only the most die hard bitcoin fanatics are going to mine at a loss without getting anything in return. Are there enough of them to prevent 51% attacks?

I would not be surprised if a large crypto exchange takes over bitcoin mining some time in the future. Crypto gamblers don't really care about decentralisation or censorship resistance. They only want the number to go up.

Users don't really matter all that much, miners and exchanges are the only parties that really matter these days.

You don't need to cap supply to set emission in stone. People are already discussing how to amend bitcoin's emission to deal with the future lack of security when reward is dominated by tx fees.

An uncapped emission like 1 coin per second forever would be more immutable as it is simple as possible (not to mention much fairer) and leaves no uncertainty about long term security.

You seem to be forgetting the hard forks of bitcoin.

https://www.investopedia.com/tech/history-bitcoin-hard-forks...

Creating new digital currencies is also rampant. It seems to me that a finite representation of the current wealth of the economy (the money in circulation) is not even desirable. New things are being created all the time that increase that wealth. It seems reasonable to be able to adjust the amount of currency in circulation to reflect that.

I personally find Bitcoin much easier to send to family than a chunk of gold, and Bitcoin’s block reward results in a far more favorable inflation rate than many currencies. There’s more to money than these two aspects, but they are IMO solid positives for Bitcoin.

What would a family even do with bitcoin or a chunk of gold?

Chunk of gold - go down to the local gold broker pay a fee to get dollars. Bitcoin - pay a fee to get it exchanged for dollars so that you can buy something before it loses it's value ($60K -> $17K).

Or just use dollars.

What if they were on the other side of the bull run where it went $3.5k -> $65k? Why only focus on the maximum loss scenario?

That would arguably feel worse for the sender. "I did what?!"

No thanks :)

Yes, let's focus on the *positive* returns of Enron, you guys.

They likely saw the $65K and listened to all the people that said it was going to $100K and never sold - watching it plummet. The "what if" scenario is pretty useless considering the entire point of any currency is to maintain value - which allows the predictable purchase of things creating an efficient market.

One of the original arguments for BitCoin was that it would maintain it's value during inflationary periods - clearly something it has not achieved. The justification for BitCoin seems to be a moving target - depending on whatever the perceived problems are - Dr BitCoin's economic cure all.

Would you trust any asset to hold its value if it goes 20x in a short period? I feel like Bitcoin will be less volatile down the road when adoption has picked up.

Aka it’s less of a crazy speculative investment and more of an actual currency.

The problem is that BitCoin is treated in a speculative manor which is generally not a good thing for currencies. Currencies are also traded but the fluctuations are generally small - when they start to get big (think Argentina) the country has a problem. An please don't say Dr BitCoin's magic elixir will fix all that because it has already demonstrated it can be forked (creating new bitcoin out of nothing) and lose value in an inflationary period. Both things touted as reasons to support it. Currencies serve a purpose - primarily to allow the exchange of goods and services. As far as I know I cannot purchase much of either with BitCoin without first converting to $$$. So it is not really a currency now or likely ever will be.

In the USA? Not much. Bitcoin is a decent choice for sending your money across borders though! It could also be a gift if you think holding it long-term would be valuable. I remember my grandma buying me bank bonds as a kid for the same reason.

I usually send money across borders using Wise.com or wire transfers. What am I missing out on with bitcoin?

Fees

What are the associated costs with those services?

Probably lower than with Bitcoin.

Really? I wasn’t aware you could send $1k for Pennie’s like you can with Bitcoin. Very cool!

You mean the equivalent of $1k based on the spot price of bitcoin? But I don't have bitcoin and my recipient doesn't want bitcoin.

If I send $1000 USD to my friend in Australia using bitcoin how much AUD do they receive? And what does that process look like?

A fraction of a percent.

Not too bad. Bitcoin would probably only be worth it if you were moving larger amounts.

I have sent money across borders countless times and it arrived just fine. No need to give my money to shady exchanges like FTX.

You don’t have to use an exchange to send a cryptocurrency. I personally use them to buy crypto, but then I send my assets to a hardware wallet asap. From there, you can send it anywhere you’d like.

If you have some spare unwanted chunks of gold i'll happily take them off your hands.

You're obviously talking about supply inflation there, because price inflation (the more usual definition of inflation) measured in bitcoin has been about 250% over the last year.

You can own both gold and Bitcoin. At a minimum unless you think those who think bitcoin is ultimately worthless are right, it’s a way to diversify a gold-like asset class along the axis they are similar.

Let's compare a highly valuable and needed metal with 6000+ years of history as a solid investment, with...cryptocurrencies and their proven record of having no real life utility but lots of speculation. Makes sense.

> Let's compare a highly valuable and needed metal with 6000+ years of history as a solid investment

Hi, I've worked in the global mineral exploration industry for decades, both as a mine worker, an exploration geophysicist, and as a compiler of a global DB that now backends the S&P mineral intelligence division.

Let's clear up some things about gold.

1) It's valuable because it's valued ..

That's pretty much it, it's kind of rare, its shiny, it "stands alone" as a noble metal that doesn't easily react.

2) Much needed - it's used in jewellry, it's essential in high end long life zero maintaince space electronics ... a great deal of other uses (Gold Speaker Cables!!) are just pure performative BD (ie. it's not "essential") - other metals are in the same ballpark for conductivity, etc.

3) The greatest single application for gold, once mined at great expense, is to be formed into ingots and sit about as bullion as "proof" of work (digging a super pit and spending > billion to recover it per annum) and proof of wealth.

It's more or less solid crypto that persists after the power goes out, can be worn as shiny jewellery, and has some neat niche applications that it is essential for.

I'm not a huge cyrpto fan, although I did hang on the cypher punk boards where the bitcoin paper was first announced (as I have a math background) - I'm no fan of the vast amount of energy wasted (IMHO) on both gold extraction and bitcoin mining.

I don't understand how does that relates to calling a cryptocurrency a gold-like asset.

There's nothing in the world with such a long history of a solid investment that goes back to ancient times on a global scale.

They're saying that gold is a cryptocurrency-like asset. Gold's value is primarily that looks cool and it serves as proof of work: the work of finding, mining, and processing it.

So basically, cryptocurrency (i.e. proof of work limited shiny token) has "a long history of a solid investment that goes back to ancient times on a global scale"

Gold's value stems from its unique properties as a metal and of its scarcicity.

Bitcoin’s value stems from its unique properties as a digital network and of its scarcity.

What would those unique properties be?

Permissionless, as in don’t need anyone’s approval and anyone can participate, transfer of value backed by trustless, as in don’t need to trust anyone’s word for it, global consensus system.

This applies to every single cryptocurrency out there, it's not unique to Bitcoin.

According to the ancestor post, gold's unique practical properties (like for electronics) constitute very little of its market value. Most of its value comes from its unique property of looking pretty and its scarcity due to work needed to obtain it, which is again the same as cryptocurrency.

Your sarcastic reply was unnecessary, if you read my post you’ll see I carved out the case you’re talking about. Time will tell.

If you can’t see literally any axis along which Bitcoin and gold are comparable, then I can’t really help you. It’s obvious there are some ways the two are comparable, even if you think these comparisons are weak or ultimately insufficient to hold up the price.

Nobody said it would be more compelling than gold or fiat. Even if it's less compelling than both, banks still like to diversify.

....Actually, lots of people have been saying cryptocurrency is or would be more compelling than gold or fiat for several years now, and deriding those of us who disagreed with phrasing like "how do you like being poor?"