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Comment by jqpabc123 | Hacker News Reader

The myth that bitcoin is an effective store of value (aka "digital gold") has just died. The proof is available in your crypto wallet.

Real gold bullion has now been fully "digitized". You can buy and hold real bullion without taking delivery, without transactions fees and without dealing with tbe schenanigans of unregulated markets and manipulators.

Over the past year of unprecedented marketplace turmoil and upheaval, "real gold" has risen just as dramatically as "digital gold" has fallen.

Only one myth left standing in the way of bitcoin's total demise --- the idea that PoW is a reasonable and effective basis for financial markets/transactions. Are you willing to put real money on it?

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I’m a crypto skeptic but the benefit of bitcoin over gold has never been ease of transaction. The benefit is that regulators and governments are generally unable to confiscate bitcoin. The same is not true of gold, particularly if you do not take final delivery.

Not true though.

"the US Department of Justice (DOJ) has also seized almost 130,000 bitcoin worth around $15 billion at the time of the announcement—the largest US cryptocurrency seizure to date."

https://www.wired.com/story/feds-seize-record-breaking-15-bi...

Here are estimates of the value of Bitcoin currently held (mostly via seizure) by the US government:

https://www.theblock.co/post/374636/the-daily-us-government-...

https://www.mexc.com/learn/article/how-much-bitcoin-does-the...

How can you seize it without the private keys? Do they force it out of the people involved?

You find the private keys wherever the owners stored them.

Do they force it out of the people involved?

Yes, in a manner of speaking.

Government has lots of coercive tools at it's disposable. For example, search warrants and incarceration.

If you refuse to hand over your keys, government can easily nullify you or your relatives ability to make use of them and make your life really bad in the meantime.

Keepjng money from government is yet another crypto myth that doesn't hold up very well in many cases.

The benefit is that regulators and governments are generally unable to confiscate bitcoin.

The US government can and has seized a lot of bitcoin so this is another crypto myth that has died.

It requires keeping the keys secure, rather than entrusting them to a custodial service, yes.

Keeping them secure from an untrustworthy government is no easy task.

If gold rises (and therefore falls) as crazy as Bitcoin, then why is it better

Because when you buy gold you don’t have to rely on shady crypto bros to cash out

You don't just want the best investment, you want several good investments that are uncorrelated with each other. Gold is better if you're looking for something to diversify your investments in the stock market, since it tends to do well when stocks are doing badly (though that's not guaranteed). Bitcoin of course has been better for really high returns, mostly when stocks are doing well. Whether that will continue is anyone's guess. Long-term returns for gold have basically matched the S&P500 total performance since the bottom of the dotcom crash.

Excellent question.

The answer is that "real gold" has a long, long history as a stable store of value and as a result, more people know it, trust it and are willing to buy it when the chips hit the fan.

Here is a chart showing the price of gold over the past decade.

https://goldprice.org/gold-price-history.html

Here is a corresponding chart for bitcoin.

https://charts.bitbo.io/price/

But I would argue that the most important and telling part is what has ocurred recently, after a crypto fan assumed personal control over the world's largest economy.

Because they're not actually equivalents. Gold has unique properties as a material, unique properties that are useful. It'd be more widely used in industry if it wasn't such a scarce and expensive material. Bitcoin on the other hand, has no use other than for conducting trade. Because of this, they inherently carry different risks as an asset.

You can use gold in tangible ways.

Over the last ten years gold is up about 5x and bitcoin up about 200x. The fact it's has a wobble doesn't prove it's all over. See Bitcoin Obituaries for the other 400 odd times people have claimed that, the first being when it was 23 cents.

>You can buy and hold real bullion without taking delivery

Not your vault, not your gold.

True. Physical possession is an option with real gold --- as is stuffing fiat under your mattress.

But even if you don't choose this route, I would argue that a fully regulated vault is a safer and more reasonable option than one that isn't.

Having an app that tells you that you have a thing is not the same as physically having the thing. Owning gold in that sense is no different than owning bitcoin: They both rely on a societal fiction that you can actually get the value of the asset when you expect that you can. In other words: The presence of a reliable financial and legal system is what makes the myth real for both assets.

We forget that the idea that the gold could be “further away from”/“not actually in the physical possession of” the human who “owns” was not universally accepted at all points in history. In a weird way, bitcoin is more forthright in that it says out loud “trust me this is valuable because we all agree it just is” where non-custodial ownership of gold tries to imply that there’s less need for this trust because there’s an actual shiny rock on the planet somewhere and humans have a history of valuing shiny rocks.

Ultimately it seems like it’s the “trust” part that mostly matters. Bitcoin is certainly harder to trust at the moment. But gold is rallying because there is less trust overall. That’s not good for either asset.

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