Comment by aedron | Hacker News Reader

Comment by aedron | Hacker News Reader

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I used to dismiss this view, because it seems so impropable that an arbitrary digital asset would be able to fill a role like gold. But it does seem to be happening, and I am coming around to the idea. What is gold after all but a commonly agreed upon medium of value transfer, suitable because of scarcity and divisability, but other than that rather arbitrary too. If enough people decide that bitcoin is a good medium, then so it will be, and that momentum itself will keep it that way. And bitcoin does have a lot of attributes that make it suitable.

There is a lot of money looking for a place to go and be safe (from loss and inflation). There are very few 'pure' ways to simply store that value, even gold is difficult to invest in, at least if you want actual ownership and not merely a promissory note. Bitcoin (or another cryptocurrency) could be one of these ways.

> ...because of scarcity and ...

I have a hard time understanding digital scarcity. Bitcoins are scarce with respect to "the" Bitcoin network, but there's nothing preventing someone from forking or starting their own clone of the entire system. While that new chain would be missing all the historic transactions of the original, is that meaningful in any important way with respect to scarcity?

The number of cells in an Excel spreadsheet are also finite, but we don't tend to impart value on them. And it's trivial to create a new spreadsheet with a whole new set of cells. What am I missing?

> nothing preventing someone from forking ...

Bitcoin code has been forked thousands of times. Only a few forks survive today, and those are worth a small fraction of the original.

That's because Bitcoin, like all money, is a social construct. It's an idea and belief shared among many people. Bitcoin, like all money, has no intrinsic value, but derives value from the network of people who find it useful.

It's much more difficult to fork a network of people and shared beliefs than it is to fork the code.

And I'll preempt the inevitable argument that dollars and renminbi are backed by the military, or by taxes, or by central banks, etc. That's all hogwash. Money isn't backed by anything other than shared belief and the promises we make to each other.

Hah! I think you'll be surprised to hear: I agree with you!

But my question was about Bitcoin's comparison to gold, specifically with respect to its scarcity.

So far, I'd say there's little evidence that bitcoin is a safe place to store large amounts of money.

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