[will_brown]

>No one likes to talk about that though, they like to demonize bitcoin which actually does something gold could never do.

Just playing devils advocate, but you can't replicate/duplicate gold. On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin. I can create a new blockchain (network) or put these coins on an existing blockchain (say the Ethereum blockchain). How much would you pay for all 21M Bitcoin? How much would you pay me to create you 21M Bitcoin2 and transfer 100% of them to you?

You say Bitcoin is $10k because ordinary people understand why a decentralized asset is the ultimate safe haven. If that is your premises it makes little sense to compare Bitcoin to gold, compare Bitcoin to other currencies. Why does Litecoin = $100 and Ether = $500? Bitcoin may do something gold could never do, obviously, but can it do anything any other cryptocoin/token can't?

The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.

[drcross]

>On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin. I can create a new blockchain (network) or put these coins on an existing blockchain (say the Ethereum blockchain). How much would you pay for all 21M Bitcoin? How much would you pay me to create you 21M Bitcoin2 and transfer 100% of them to you?

Econ 101: The price of a currency is based on people's trust in that currency.

>The real irony is cryptocoins and blockchains couldn't even exist without gold, because it is a necessary component in the machines that created bitcoin, that hosts blockchain nodes, mines, hosts wallets and facilitates transactions.

That's not irony. Thats a happy coincidence.

[lokedhs]

"Econ 101: The price of a currency is based on people's trust in that currency."

Right, but how many people really trust Bitcoin? And by trust, I mean trust that it will retain its value for the foreseeable future.

I have trust that the Euro will retain its value, so I feel confident pricing my product and services using it. On the other hand you'd be crazy to price anything in Bitcoin.

No one has trust in Bitcoin as a currency. Some people have some degree of trust in it as an investment vehicle, which is fine. That doesn't make Bitcoin a currency any more than gold is.

[vabmit]

I wouldn't say no one. There are a number of companies that trust Bitcoin enough to use it in trade for their goods and services. For example, ProtonMail (a secure private e-mail provider) trusts Bitcoin enough to accept it in trade for its services.

So, the same thing that gives the Euro and Gold value (that people will take it trade for goods and services) is one of the components accounting for Bitcoin's valuation. The majority of Bitcoin's value at this point is likely speculation. However some percentage of the value is not derived from currency arbitrage or speculation.

Even if Bitcoin trade participating merchants do not trust the market valuation of Bitcoin enough to be willing to hold Bitcoin for very long after they accept it as part of a transaction (and therefor immediately convert it to USDs) it is still valued by the participating merchant in line with the trade. The same could be said for the value of the electronic ledger recordings created by credit cards. They are generally viewed to have around equivalent value to USDs. But, they are not a currency either.

[ric2b]

> I have trust that the Euro will retain its value

You must feel very betrayed every year when you look at the inflation rate and the price increases...

[vilmosi]

The euro zone had around 1.5% inflation this year, what are you talking about?

[ric2b]

How is that retaining it's value? That's nearly 10% gone after 7 years.

And that's assuming 1.5%, some years are worse.

[Fjolsvith]

> On the other hand you'd be crazy to price anything in Bitcoin.

Why? It was easy to add Cryptocurrency as a purchasing option for the online store for my shed business. My buildings are priced in dollars, but people can use crypto to pay and the crypto value is pegged at the current rate of trade on an exchange.

Bonus: I can use the crypto to go buy materials - never have to convert it to dollars.

[gitgud]

If they're priced in dollars and converted into Market price Bitcoin at the checkout... then they're obviously not priced in Bitcoin.

[pfisch]

For international sales we accept euro/yuan/pounds/etc but instantly convert it to dollars. I would say that we are pricing in those currencies.

[vilmosi]

But from what I understand, I still owe you $10, even if I pay you in pounds or euros.

[will_brown]

>Econ 101: The price of a currency is based on people's trust in that currency.

That is the beauty of blockchain right? Its trustless! I'll create 21M of Bitcoin2 on the Ethereum blockchain and send you the smart contract address you can verify on etherscan and boom there is no trust needed.

Edit: As to Irony, OP could have used anything to justify the value of Bitcoin, it is ironic he would select Gold and say it has no intrinsic value other than looking good as jewelry, when it is a intrinsic component to the Bitcoin ecosystem. Notwithstanding, I don't think its a coincidence OP compared Bitcoins value to gold.

[SilasX]

The OP meant "trust that it will continue to hold value", not (merely) "trust that transactions happen as intended". The blockchain crypto-magic only ensures the latter.

[ErikAugust]

Right, it's not irony. All things couldn't exist without elements, like gold. Truisms aren't ironic.

[koonsolo]

> On the other hand I could create 21M cryptocoins on a blockchain (calling them Bitcoin2 or even just Bitcoin if it pleases). I can make them function identically, similarly or more efficiently than Bitcoin.

You can do the same thing with Facebook or Twitter, but the value is not in the code or functionality, it really is in the network of people using it.

[RexetBlell]

Why can't you replicate gold? What is gold? It's some elementary particles (like quarks) arranged in a certain way that we all agree are valuable. We could easily agree that some other arrangement is valuable (such as Aluminum).

[bezieio]

Here's an interesting presentation by the Winklevoss twins that steps through the elements and narrows down which could be used as currency and why:

https://www.slideshare.net/winklevosscap/money-is-broken-its... (Slides 7-17)

[BorisMelnik]

good point...also what happens if we start digging on Mars, or some other planet and find 1000 tons of gold?

[sobani]

187,200 tonnes of gold has already been mined. So another 1000 is going to be a blip. At 1M it could become interesting though :)

https://www.gold.org/about-gold/gold-supply/gold-mining/how-...

[Fjolsvith]

I am certain that asteroid mining will happen sooner and be far more profitable.

[keymone]

For all intents and purposes finding a large deposit of gold is the same as duplicating bitcoin. Except the former can happen easily and the latter requires some immense investments to achieve.

[ErikAugust]

You say 21M "cryptocoins" but you couldn't, however, create 21M BTC arbitrarily.

As long as that number stays the same (it isn't completely immutable) then BTC has real scarcity - making it a store of value, like gold. Throw in some additional properties that BTC has that gold does not, and an argument can be made that BTC is at least a decent value store.

Even at $100,000/BTC, Bitcoin would still have a ~1/5th of the market cap of all gold mined.

And in a truly universal sense - gold is made by stars. There are 100 billion stars. There's only one Satoshi in the known universe ;)

[empath75]

But there have been multiple bitcoin forks— bitcoin cash essentially doubled the amount of bitcoins in circulation.

[keymone]

Good luck buying some BCH and spending them as BTC.

[ErikAugust]

Bitcoin Cash is BCH. Bitcoin is BTC. There will only be 21M BTC. As far as I know, there will also be 21M BCH. But BCH != BTC.

[mrhappyunhappy]

Only if people use it.

[bb88]

What exactly is a BTC? BTC is man made, and depends upon computers and software. And the people who control the software can change their minds, if they so choose. So what a BTC is now, may not be what it is later, including its scarcity. See also the ETH and BTC forks.

Gold on the other hand exists naturally in nature, and doesn't change based upon someone else's whim.

So no, BTC is not like gold.

[keymone]

BTC is what the distributed consensus says BTC is. You can’t fake that without pouring billions into building up mining infrastructure to organize a 51% attack and even then the distributed consensus will simply fork around your amazing achievement of successfully doing a single double spend?

So yeah, BTC is definitely not like gold, it’s way better.

[bb88]

Well, you can't double spend gold. You either have it or your don't. And until the matter replicators come into existence, nobody can fork gold.

As to your argument for the 51%, say, Visa comes out with a fork called VisaCoin(TM) that allows one to use a visa card to make transactions directly from VisaCoin (which is a BTC fork).

So that was two to ten people, maybe and what an ad slogan?

And here's the ad slogan: "When you go to the Fog City Diner in San Francisco, take your visa card, because they don't take BTC!"

[orcasauce]

How is BTC better than gold? What can I do with a bitcoin? It's just data. It's still a fiat currency. Gold is specifically not a fiat currency because it has real world applications. I will agree cryptocurrencies are better than other forms of fiat currency in that there is a definitive quantity, similar to a non-fiat currency, but it's intrinsic value is in the trust others will accept it in exchange for something that has real value.

Suppose a solar flare destroyed all existing digital equipment. What would a physical printout of a wallet be worth?

[keymone]

Bitcoin is better than gold because in virtually all aspects

- it’s scarce by design, not by our belief in inability to find more of it on this planet or some asteroid

- it’s mobile, transporting gold is pain in the ass

- it’s secure, securing a little piece of paper is easier than deposit of gold

- it’s divisible, sividing gold into nanograms is not practical

- it has transaction platform built in

As for practical application of gold - it’s not where gold’s value is derived from.

And what if an asteroid hits the earth and we are all dead?

[bb88]

This kind of gets into some philosophical points, so I'll take them 1 by 1.

> it’s scarce by design, not by our belief in inability to find more of it on this planet or some asteroid

Scarcity is ironically one of the reasons gold is treasured. It's a natural scarcity not a man made scarcity.

> it’s mobile, transporting gold is pain in the ass.

Most gold exchanges don't require you to physically take gold home with you. It's stored in a vault and traded like any other security.

> it’s secure, securing a little piece of paper is easier than deposit of gold

BTC is not a piece of paper, and requires that only one person not be smart enough to break the BTC encryption model.

Gold can be stolen, but not all of it at once. But apparently BTC can be stolen too.

> it’s divisible, dividing gold into nanograms is not practical

Today's cost of gold to grams is $40.17. Practically speaking, we don't need nanograms to get to penny scale. A centigram of gold is good enough.

> it has a transaction model built in.

I hand you an ounce of gold. You give me $1000 dollars or something else in value that I want. That transaction method has been trusted for eons now.

[Fjolsvith]

> Suppose a solar flare destroyed all existing digital equipment.

Suppose someone invents a way to turn lead into gold?

[gbear605]

One of these things is not like the other!

[pellucide]

how exactly does this happen. This has to involve protocol change or is there something in bitcoin protocol that forks around a chain when a double spend is detected. And how exactly is a double spend detected ?

[keymone]

Diuble spend is detected when a longer chain is published to contest the currently accepted chain with orphan depth of more than 5-6. This is huge deal and will decimate butcoin valuation for sure, but just as with acceptance of segwit and hardforks around protocol bugs in the past - there can be agreement made to deploy a version of bitcoin software to hardcode which chain is valid.

Not saying this is easy but when the project is attacked like that, there will be some action.

[coolspot]

By "distributed consensus" you mean couple chinese guys who own all bitcoin mining?

[keymone]

Bitcoin mining is fairly diversified, with new players about to enter hardware business.

[placeybordeaux]

If we decide to say that iron is gold as well then we have created more gold on our whim.

Bitcoin is defined as having only 21 Million tokens in supply. Until the majority of people change their belief in that it will have that many.

[bb88]

The idea of what BTC is controlled by a dev core of several thousand developers.

The idea of what Gold is is controlled by 6 billion people.

[dajohnson89]

the decentralization of btc (# of miners and holders) is hard to beat...