Comment by dustinmoris | Hacker News Reader

Comment by dustinmoris | Hacker News Reader

Unlike gold a BTC has absolutely no use beyond whatever its current use is. The only way for a BTC to be ever in demand is if enough people trust each other that nobody will start selling it in large mass and therefore entirely flooring the value of it. However trust is not exactly a great foundation for a currency's value. Gold has at least has some useful applications outside of banking. For a start it looks beautiful, it is highly in demand in fashion and jewellery an it has also great application in electronics. This is a much better foundation for being resilient against a complete loss of value and promising longevity.

Besides BTC has serious flaws in order to attract a critical mass. It is extremely unsustainable - for example buying a sandwich with BTC requires more energy than a house for an entire week. This is alone is just horrible, especially in times when we should be trying to save our planet and not waste energy for shits like this. Secondly with it's current volatility the people who own BTC are much much less likely to spend it somewhere, because of the hope of gaining more value. However if nobody is willing to spend their BTC then adoption will lack and eventually counter act on it's value.

Thirdly you can't really convert the value of BTC into hard cash and even if you could, before you'd finish converting a large amount of BTC into cash you'd have halved the price of the BTC as part of the exercise.

Overall the technology behind it is interesting, but BTC I honestly think will massively flop and the current hype comes from pure greed. Investors trying to convince the populus to buy into BTC so they can finally cash out, but the reality is that for the normal person BTC is literally too cryptic to jump on the train and tech savvy people know better that it's too late now. It's too volatile and anything can happen. You don't buy expensive assets which are so widely known that they are in the news every day. This is too late.. we just watch and wait for the burst.

This is basically all of the worst arguments against Bitcoin collected and thrown together in the same comment.

First of all, the industrial and jewelry value of gold is so far below the current market price, that if suddenly everybody decided that gold was only worth its utility value people holding gold would lose almost everything. The difference between 95% and 100% is really negligible.

Secondly, on power consumption, the whole "one transaction requires more energy than a house" is basically sophistry. Even if this number wasn't overstated, it's stated in a way that assumes that this is static, that buying a coffee costs a house worth of energy.

No matter whether you are a Bitcoin person or a Bitcoin cash person, the number of transactions per unit of energy in no way will stay the same. If you are a Bitcoin person, you will see the lightning network, which will increase transaction throughput by several orders of magnitude, and if you are a Bitcoin cash person, the block size will increase continuously, shoving more and more transactions per block.

Thirdly, the claim that you can't convert Bitcoin into cash is simply stunning. I use Gemini as an exchange daily, and I've witnessed $1 million being liquidated into US dollars in a couple of hours without much slippage.

Finally, I would ignore the final paragraph because this person has shown that he knows absolutely nothing about Bitcoin or cryptocurrency.

What percentage of the value of gold do you think is due to its “inherent” value in jewelry or electronics? I’d wager it’s incredibly tiny, and I don’t understand your argument that gold is a reasonable store of value only because it has some tiny bit of “inherent” value.

It has a lot with it to do, because a lot of today's asset value is based on pure emotions of investors and their feelings and if something is actually physical, which you can see, hold in your hands, which has a very shiny appearance, is being worn by rich people around their necks and is used in the most sophisticated electronics (which itself is required for the world to function nowadays) influences one's feelings a lot - so yes, the fact that gold has these attributes plays a huge role IMHO.

On the other hand a BTC is literally just a made up hashsum which is not only extremely volatile on the markets, but could also very easily just physically disappear through loss, theft or just malfunction.

But if you’re going to use emotions to explain a significant portion of gold’s value, surely the emotions of Bitcoin traders should provide an equally legitimate explanation of Bitcoin’s value.

I don’t really like appeals to “inherent value,” except for assets that can be expected to be desirable to almost any individual in almost any conceivable scenario (like food). Even then, there is some level of social or “network” effect, because in order to trade food you need your trade partner to have confidence that your assets are genuine (e.g. it’s not fake cans of beans) and that there is some fundamental protection of property rights (e.g. you’re not going to trade your canned beans for their eggs, only to immediately steal back their eggs using the threat of force).

In that sense, all “inherent value” is just an abstraction based on your confidence in your ability to predict the future behavior of other humans, which isn’t so different than your decision today to trade fiat currency for cryptocurrency (or even to trade your labor for fiat currency, like most of us do in traditional jobs).

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