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Comment by maclured | Hacker News Reader

> I really don't understand this urge of breaking down anything digital into its fundamental units to try and diminish its value. It's the equivalent of evaluating anything in the physical world as "just a bunch of atoms".

Because in the good times, people think these things are great investments. But as soon as things go south they look at what they have from a different perspective. Something with some intrinsic value (e.g. a "bunch of atoms" that can be eaten or lived in) is likely to be much easier to rationalise holding on to in that scenario, rather than something that's only worth something due to consensus by a bunch of strangers.

And that's the risk - it doesn't matter if as an individual you see great potential. If everyone else disagrees, gets scared and sells, then BTC could be battered.

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Most subjectively "useless" objects are used as a store of value. Only 7/8% of gold is used in the manufacturing industry, the rest is sitting there with no active purpose other than existing. Same goes for collectibles (you can't eat or live in a baseball card or a valuable artwork).

Also the "live in" is a big misconception. Real estate doesn't increase in value. What does is the land on top of which it sits. A house depreciates over time exactly like a car (prefabs on rented land are a great example of that).

The only question that matters is: is Bitcoin better than commodity X? Where X can be gold, silver, oil or whatever else. And if the answer is yes there's no reason to believe it wouldn't take over X in terms of market capitalization (and, therefore, value).

> The only question that matters is: is Bitcoin better than commodity X

No. The only question that matters is will people collectively continue to agree that it's worth something, lacking any intrinsic value?

If interest rates go up and people need to call in their assets to repay their debts, what do you think will happen? Would people rather lose their houses or their bitcoins?

I think people will dump stocks and risky "assets" like BTC and take flight into cash with some percentage in traditional safe havens with a proven track record (like gold) until things settle down. This is exactly what happened a year ago. There's no reason in my mind to believe anything would change regarding BTC's status now - I think it'll be dumped like it was last year. It may recover faster (I'd certainly buy it for a heavy discount), but I just don't buy the "store of value", "digital gold" argument.

It's an early-stage speculative asset IMO - let's not pretend it's a stable, low-risk store of value.

> A house depreciates over time

Tell that to people unable to buy because house prices have shot up. Property can also generate a good rental income - yield obviously dependent on the price paid. BTC doesn't provide any such perpetuity.

You fail to understand 3 things:

1. There is no such thing as "intrinsic value" and I explained clearly why in a different reply to your comment.

2. What goes up is the value of land, not houses. If houses themselves were valuable movable homes would also increase in value. They don't. The reason why land goes up in value is that (residential) land is scarce.

3. Gold isn't a safe haven because of its track record (in fact gold is relatively volatile [0] and if you had bought gold in 1980 you'd have lost money today, adjusted to inflation), it's considered a safe haven because it's the only commodity that has a historically predictable stock to flow and can (and normally does) act as a hedge against inflation. Bitcoin does that and more.

> It's an early-stage speculative asset IMO

So was gold in its early stages as a store of value. So is any valuable company's stock in the first few months after IPO. Speculation is uncorrelated with the lack of fundamental valuable features.

At this point I'm not sure your intent is to try to understand more about Bitcoin (or economy, for that matter) but rather to force a narrative that isn't at all obvious, unlike what you're trying to imply. And I'm not saying you're wrong, rather that you're unable to corroborate your statements with data and facts.

"And for that reason, I'm out".

[0] https://www.macrotrends.net/1333/historical-gold-prices-100-...

Please don't post in the flamewar style to HN. You've crossed noticeably into that here and it's not cool—we're trying to avoid that kind of thing on this site.

If you wouldn't mind reviewing https://news.ycombinator.com/newsguidelines.html and sticking to the rules when posting here, we'd be grateful.

Again, I apologize. It was a knee jerk reaction to being told I don't understand something without proof. I believe that also violates numerous guidelines:

> Be kind. Don't be snarky.

> Please don't post shallow dismissals, especially of other people's work. A good critical comment teaches us something.

And I disagree with:

> You've crossed noticeably into that here [emphasis mine]

I've only done that in 2 comments towards the same user who also behaved similarly towards me. All my other comments have been polite, constructive and filled with references.

I didn't mean you'd done it in more than 2 comments, just that it was a noticeable shift. Thanks for the kind replies!

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