Bitcoin vs gold as a store of value
As some old saying goes, the value of a thing is such as people believe it to be. There is no intrinsic value, only a “con game”. I think it’s mostly true, and it applies to both assets.
First, let’s address the notion of transaction. It’s well understood in the context of purchase: you pay the money, you get the goods. And the idea is that somehow it has to be atomic — either both, or none. Since this is physically impossible, there are mechanisms to remediate the situation: intermediaries, arbitrages, courts, and most (un?)important, if service provider is larger than client, they have a reputation to maintain (court of public opinion). I’m sure you can think of other options, but it’ll all be far from ideal, just the best we’ve got. That banks call it a “transaction” when you pay $3 for a fidget spinner on aliexpress doesn’t mean they know anything about the transaction or will be able to keep it through. They are interested in the money transfer that you’re asking them to do. Transaction for a bank is based on the agreement that you are sending money legally (AML and maybe some other stuff that bank needs to check), the seller is just 3p for which the bank can give no guarantees. Luckilly, bitcoin has nothing to do with this AML BS, they just approve everything based on community consensus. It means, bitcoin has absolutelly nothing to do with transactions. I’d have no problem with it at all, only if they didn’t call bitcoin transfer a “transaction”. With bank transaction, you at least have some guarantees, with bitcoin protocol there is 0. So why are bitcoin transfers called transactions? Bank transaction = 0.1 transaction. Bitcoin transaction = 0 transaction. And the 0 for bitcoin will be there forever, while with bank you at least have some chance to present your case. With bitcoin, there is no option to present your case except to overtake the whole network, which is p ->0.
Let’s try to break down value propositions of these things wrt (with regards to) physical value, and perceived value. Like a Platonic view, where there is “world of ideals”, and “world of reality”. Plato’s idea was that there are ideal things, like perfect cube. They are impossible in real world, but they are possible in our imagination.
Idea of bitcoin
Scarce free market currency, where all transactions are approved by community consensus.
Idea of gold
Physically scare, it’s established store of value which will keep on going, because there is nothing better.
Reality of bitcoin
Purely computational asset with no mathematical significiance, no transaction guarantees, it’s not a currency.
Reality of gold
Jewellery is as much BS argument for utility of gold as it is currency for bitcoin, gold is valued because it’s gold. Also, it’s not a currency.
They are basicaly the same. Bitcoin can be a new gold, it’s up to politics to decide. It’s digital only aspect means it may be easier to confiscate also, so governments should be happy about this developmement.
To be fair, I know nothing about gold, but i know everything about bitcoin from technical side. So while I believe bitcoin has no future, why did gold have if they are basically the same?
