Comment by TheBruceHimself | Hacker News Reader

Comment by TheBruceHimself | Hacker News Reader

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TheBruceHimself

I just don't understand why you'd choose Bitcoin over gold. Gold, like Bitcoin, was criticized for just being a stupid store of value, but that wasn't completely true as it undoubtedly had some utility in the economy. Worst case comes and the market crashes, you know there's at least someone somewhere buying. What does Bitcoin get you over gold? The same "it's scarce and therefore valuable" narrative so you can store your wealth there, but it's not got the intrinsic value of gold. If the market crashes, you can't sell Bitcoin to someone to make jewelry or false teeth.

If you want to argue that people could theoretically discover a lot more gold or bring in an asteroid one day full of it, okay, but then why not just by land then? Even better than gold, there's a potential for some income too. Or why not just go with something that's equally as scarce like vintage wine? You literally can't make anymore wine of a particular year; it's inherently scarce.

There are many reasons to choose BTC over gold:

- easy to transmit

- easy to store (but both gold and BTC are dangerous to store at home from the security standpoint)

- easy to buy and sell

- BTC is actually limited (capped). There's no practical limit to the amount of gold. You're always one tech breakthrough away from gold becoming very common - read the history of aluminum, they used to make jewelry out of it.

- impossible to counterfeit. Even banks struggle to detect counterfeit gold

- gold for payments is completely impractical, BTC has Lightning network that seems to work.

- BTC is programmable

But how much of the price of gold is its intrinsic worth? A fake gold ring made of some alloy can look and feel almost exactly the same as a real one, but as soon as you find out that it isn't real gold it suddenly loses 99% of its value - maybe it's not magnetic or it is slightly the wrong shade, but the value of gold isn't assigned for not reacting to magnets.

Only 11% of gold is for industrial purposes, so I think that if the thousands of years of cultural association of gold with wealth suddenly disappeared and people decided it was a bad investment, then it would be basically worthless.

> its intrinsic worth

There is no such thing as "instrinsic worth".

There's only supply and demand.

Why there is demand for a certain good is a many-colored and complicated affair.

there is intrinsic in the context of where we are as humans, that's why saying that there is intrinsic worth is correct. Humans need to eat, intrinsically. I guess partially it depends on whether the word 'intrinsic' still applies.

Using that definition, air too has intrinsic worth.

But I'm skeptical about the usefulness of this definition.

it's the only useful definition because what else would ever be useful just for its own sake? There has to be a reference point and the moment you have one, it's technically not intrinsic anymore. So we can't do that.

It's not because a word exists that it makes sense to use it.

The (scientific) word æther exists too, but you would only use it in a historical context.

Well if you need to send someone a sum of money instantly anywhere in the world for no fees, it’s kind of unrealistic to meetup with gold bars

Indeed, when I wanted to send $2000 across the US-Canada border in 2021, I found to my surprise that doing so with BTC within Coinbase was the cheapest option.

Yep, even coinbase is stretching it to be honest since it’s still a centralized exchange, but still miles better then traditional options

To follow up on the idea.

It HAS a physical tie: it is the energy spent to run the chain, which is, however, backward to gold being a material. And it's not to the advantage of the owners, but of the miners.

I can easily see a catastrophic scenario out of this: a downward spiral of value happens for XY reason, and then a halving happens. That makes the mining of it suddenly highly costly, which makes it uninteresting, or less and less profitable to mine, which renders the chain slower and less popular, etc.

However, I think that the popularity of Bitcoin is still on the rise, and we won't see such a downward spiral before many halvings (20 years? That's a lot of GWh lost to useless computing...)

You're forgetting about difficulty adjustment. Every time mining gets more expensive large number of miners drop out. This causes the difficulty target to drop. The remaining miners then start mining more blocks and profits rise. As a system it has built-in economic incentives to keep in in homeostasis.

You can’t store $100m of gold in your brain and transit through an airport with just a sneakers in your backpack. If you happen to need this, you’ll realize how revolutionary bitcoin is.

Bitcoin offers portability by not having to store gold. Rapid price changes.

One is more stable and the other more lucrative.

The last two things are descriptions of the markets of those things not the things themselves.

Agreed. Bitcoin is worthless unless you dig random characters. You can't eat it or wear it and it isn't used in industry.

The same can be said about money or cash.

as an extreme example consider holocaust survivors who managed to escape with jewelry or gold as a "store of value". Then those who managed to escape but the family member with the gold did not. With bitcoin, it could be written down or even committed to memory by your entire family

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