Once people can price a coin in terms of real-world assets like storage, it becomes easy to see when the coin is overvalued.
IMO, this is why Bitcoiners aren’t actually interested in making Bitcoin easy to use for payments. They only want two use cases: Buying and holding. Selling or spending will only drive the price down.
TL; DR The political history of deflationary currencies, which until modern times meant any metal-based currency that wasn't being mined at a rate similar to or faster than economic growth.
This seems doomed to backfire when people realize that the vast majority of crypto is held by lucky early adopters. A hypothetical Bitcoin dominated economy would be nearly the polar opposite of fair or democratized. I expect the populist angle to fail as people catch on to the incentives of early adopters, both private and institutional.
The best I can think of are the possible governance challenges if the major holders have interests that run counter to those of small spenders, say, when arguing over block size or other structural changes.
> I don't think the selling points for populists included "...and everyone will have roughly the same amount of money, too!"
That wasn't the point at all.
It would be one thing if we introduced a cryptocurrency alternative to existing wealth in a 1:1 ratio.
However, that's not possible with Bitcoin. The only way to get some Bitcoin is to trade your existing wealth for whatever amount of Bitcoin can be purchased on the open market. That value has changed by literally 30,000X over the course of a few years.
Migrating to a Bitcoin economy would be a massive wealth transfer from late adopters to early adopters. We're obviously not going to replace current money with Bitcoin, but if we did it would mint billionaires out of people who invested trivial amounts of money in 2010.
However, no new value is created in the process. So where does the billionaire-level wealth of early adopters come from? It comes from late adopters.
Moving bit by bit to a Bitcoin economy is a great way to transfer wealth to early adopters and make everyone else pay for it. Bitcoin people won't admit it, but that's a huge part of the draw of Bitcoin speculation and the reason why so many Bitcoin holders are pushing for a Bitcoin economy.
That's an interesting thought experiment. Suppose we convert to a bitcoin economy today. My bank account gets converted over, and my next paycheck will be in bitcoin. Did I lose any money today?
Prices work in the opposite manner, it's the sum interactions of market participants that drive the price equilibrium. Something being related to a "real-world asset" doesn't make it any easier to price. See "Economic calculation problem" for further discussion.
Or undervalued. If you are speculating on exchanges on a daily basis it doesn't matter but for long term holding, which is the easiest strategy for most retail investors it's not a bad thing.
People who have been through this cyclic process already are looking towards the end of the current market run and are suggesting something like a 60% btc 30% eth 10% altcoins that might spike a lot for holding until the next cycle. Why? Because btc/eth are "stable", which in crypto terms they are. This is an important change in sentiment.
Don't forget that gold has different sell and buy prices to discourage speculating on it's pricing( just enough so that right about anything will outperform it in the relevant timeframes). It wouldn't be unreasonable for something similar to happen to asset types of crypto.