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Comment by baby | Hacker News Reader

That’s nonsense. Bitcoin is as good a store of value as gold due to one unique feature: scarcity. Actually, it’s even less power consuming than the gold industry and is much more transparent. I wouldn’t really advise bitcoin for anything else, like day to day transactions, although I and many of my friends have used bitcoin to transact on dark markets and it works.

The only argument I’ve heard about gold being better than bitcoin is that you can do something with gold. That’s horse in my opinion. Gold is good for nothing useful imo, but is used in jewlery and other because it has value (not the other way around, as in gold has value because people make jewelry with it).

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> Gold is good for nothing useful imo, but is used in jewlery and other because it has value (not the other way around, as in gold has value because people make jewelry with it).

You do know that gold has super low reactivity and it's a very good conductor, right? :-)

The vast majority of mined gold in existence is not used for industrial purposes.

But industrial use is big (see the link from the other poster, 37% in the US), and growing. Gold is a very useful material and not only for its shininess.

The current pricing of gold has nothing, repeat after me, nothing to do with its industrial use.

(Irrelevant Truth Rhetorical Fallacy)

This is an underappreciated possibility of bitcoin.

All that insane amount of gold that's collecting dust in vaults being used as a store of value? Suddenly free to be used productively if bitcoin replaces it. Same with real estate that owners let sit unsed because they're primarily using it as a store of value rather than a productive asset.

How often is it used for that use case? Does gold have a high value due to this? No. I would even say that we might see more use industrially if people weren’t inflating its price by using it as a store of value.

37% of gold use in the US is for electronics.

https://geology.com/minerals/gold/uses-of-gold.shtml

Unless I'm mistaken, this is showing gold used for anything but storage of value. So that number is misleading.

Stats that include gold used as a store of value show much different numbers. But as I said earlier, the price of gold was never inflated by industrial use, it’s the other way around. The good thing about bitcoin: you’re investing in something that won’t negatively impact real world use cases.

> How often is it used for that use case?

100% of all cases. You just used gold to ask that question.

Most gold is not used for industrial purposes

Well, low reactivity is why it stays shiny, right? People like the shiny squishy heavy rocks

Scarcity only matters if there's demand.

I could take an A4 sheet and draw a triangle on it. It's scarce (there's only one A4 sheet with that precise badly-drawn triangle), but since nobody wants it, it's worth as much as the paper it was drawn on.

The same happens with both Bitcoin and gold. Since they are scarce, as long as there's enough demand their price will increase. However, there's a difference: gold has industrial uses for which there are no replacements with the same characteristics, and this provides a baseline level of demand. For Bitcoin, that is not the case; for any use case, there is (or can be created) another cryptocurrency which can be used instead of Bitcoin. This means there's no floor for the Bitcoin demand; for instance, if everyone decides that Ethereum's proof-of-stake is the best thing since sliced bread, the demand for Bitcoin can almost completely evaporate, and its price will go to zero. (There's a small intrinsic demand for Bitcoin as a collectible, since it was the first proof-of-work cryptocurrency, but that by itself is not enough to sustain its price.)

Was there an industrial demand when gold rush was a thing? Do we see significant proof that industrial use has a significant impact in gold being used as a store of value (besides theories)? Is that industrial use strongly linked to gold’s high price? Then how do you explain bitcoin replacing gold successfully?

With only the industrial value of gold propping it up, its value would likely drop to 1/50th of the current price. So who cares about having a floor if it’s that low?

If Bitcoin all of a sudden had a floor that was also 1/50th of its current value, no one would care.

Gold is very much used in almost any electronic appliance because it's a noble metal with low electric resistance.

Jade however is actually without any industrial application and is purely valued for it's scarcity.

Nope, sorry.

Bitcoin doesn't store anything, you can only get real wealth back for it if someone decides to trade. Then they are in the position of holding a worthless token that they have to dump on somebody else, ideally higher - and people only buy if they expect that to happen. Theoretically pumps and dumps could continue indefinitely, but in reality people are going to get bored of it and move to newer and more shiny ponzis.

Real wealth has value regardless of what other people think about it and has it by itself. A profitable company is a form of wealth even if nobody wants to buy it - because it generates profits. Same for farmland. Things with direct utility have value in that utility. Utility is ultimately defined by physical needs, which makes it an objective metric of value that can only be estimated better or worse by humans. Value isn't subjective - people and societies that are too wrong about valuations for too long wither and die (possibly conquered). The West as a whole is definitely on that path.

Gold was a store of value when governments forced people to pay taxes in it - selling what they had for gold - for thousands of years. It's not a store of value as that ended. Some people just didn't get the memo yet, but new generations are visibly unenthusiastic about gold, so it's only cultural inertia. It has some utility in itself, so it's better than bitcoin, but its price based on that demand alone would be much lower.

Bitcoin is scarce like beanie babies are scarce, except you can make more bitcoins.

Their scarcity is not "like". The owner of beanie babies has/had full power to produce any amount of beanies, inflating their supply. The owner could start up the factory again and flood the earth with beanies.

Bitcoin scarcity is protected by mathematics and the nature of the universe. And the public ledger.

I guess anyone can dream up a new mathematical system and ledger and unlimited dreams can be dreamt making more supply of electronic currency. But the specific instance of a dream "bitcoin" and it's public ledger cannot be inflated.

No you cannot

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