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Comment by trevyn | Hacker News Reader

A different (more modern?) cryptocurrency could serve all of those needs, which is a threat to the fundamental value of Bitcoin.

For comparison, the "fundamental" value of USD is a trust in the US Government to maintain its value. Comparing that to the fundamental value of Bitcoin would be a fun discussion to have, but the fact remains that the US has done it for 225 years and Bitcoin has done it for less than 9 years.

Actually, by that reasoning, I guess the fundamental value of Bitcoin is the distributed self-interest and capability of Bitcoin holders to maintain Bitcoin's value, which is obviously a powerful force.

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>A different (more modern?) cryptocurrency could serve all of those needs

People always underestimate the power of network effects. People have been predicting the demise of facebook for the last decade. Surely something better will come along at eat its lunch, right? Wrong. Network effects are and always will be king.

Why haven't network effects brought to Bitcoin mass adoption already, then? The very nature of network effects is that they are an accelerant for adoption, why hasn't this happened? It's been 8 years.

Network effects isn't about adoption necessarily, its about defense. If a cryptocurrency is going to be mainstream, it will be bitcoin barring some massive self-inflicted wound or some new game changing technology. But adoption hasn't reached critical mass because there are still many usability barriers. Hopefully with segwit we'll start to see those barriers fall away.

Like I said, I stay on the ball. I'm not going to lay out my investment thesis here.

But the point is that a "strong fundamental" means that there is a widespread long-term belief in whatever backs the currency. Bitcoin is too new to have this in human timescales.

Can you make money speculating in Bitcoin? Obviously. But it is not fundamentally backed by something that people have long-term trust in -- it is only worth what you can trade it for at that moment.

I trust cryptography & networks. I've lived a large part of my life on networks. Never talked to a politician.

> but the fact remains that the US has done it for 225 years and Bitcoin has done it for less than 9 years.

The USD was backed by gold until Nixon, you can only count the last 40 something years against Bitcoin's 9.

The USD was backed by your trust in the government to give you its gold upon demand, not an intrinsic ability to physically convert a note into gold, so nothing really changed with Nixon.

Mind blown, right? :)

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