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Comment by josu | Hacker News Reader

I'd say that an analogy with diamonds works: There is an infinite supply of lab-made-diamonds, however they are not fungible with real diamonds. Them being substitute goods, lab-made-diamonds may have negatively impacted the price, but real diamonds are still considered scarce.

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> There is an infinite supply of lab-made-diamonds, however they are not fungible with real diamonds.

Ada Diamonds sells lab-grown diamonds and jewelers can't tell https://news.ycombinator.com/item?id=17228369

De Beers admits defeat over man-made diamonds https://news.ycombinator.com/item?id=17183603

There is nearly an infinite supply [for all practical purposes] of mined diamonds, for that matter. And lab-made diamonds are real, and aside from the early versions being a little too perfect they are indistinguishable from mined diamonds.

There's an infinite supply, but there's non-zero cost associated with accessing incremental units in that supply. (And some would say diamonds are an artificially constrained market anyway.) With crypto, there's arguably an unlimited supply at zero cost.

> With crypto, there's arguably an unlimited supply at zero cost.

I like that one. Makes it seem like its a perpetual motion machine and we all know how that ends.

The mining cost is actually quite high for bitcoin, there's a friction involved that's being overcome.

They pretty much are fungible with natural diamonds. High quality synthetics can't be told by eye from equivalent quality naturals.

If they're < 1ct., it doesn't pay to have them analyzed.

"Real" diamonds have always been considered scarce, but only because of marketing. De Beers, AlRosa, etc. have very large reserves of natural diamonds. Over time, they will become genuinely scarce, as the industry agrees that economically recoverable deposits of natural gems will decline after about 2020.

This analogy isnt complete though because it doesnt take into account network health. Its easy to make a cryptocurrency, but hard to build a network large enough to defend against various attacks. There are many, man coins out there suseptible to double spending - bitcoin is the most secure, and this security adds some value in itself.

Maybe you're jumping to the conclusion too fast. Most coins don't have publicly declared vulnerabilities (ie there might be many 0days). But it might be untrue that bitcoin price is not being manipulated (an attack itself on the network) based on multiple articles on HN alone.

So bitcoin might not be too unique or valuable.

Diamonds aren’t scarce. They are just unevenly distributed, and a few cartels own the means of production. The resale market for all but the most valuable diamonds is complete crap, because deBeers keeps bringing enough new diamonds to market every year to meet demand.

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