[spookthesunset]

Nobody knows why the value of BTC decided to spike like it did last year. Just like nobody knows why it is sliding back down to earth.

It is one of the many reasons it makes a piss-poor store of value.

(Of course the answer to the spike could very well be “somebody fired up the tether printer” plus “super shady exchanges did tons of wash trading/oughright made up fake transactions”.

[awt]

It is indeed a piss-poor store of value for people who have high time preference, but unmatched for those with low time preference.

[tptacek]

There is no insane investment you can't say that about. Those metallic-cover special issue Marvel X-Men comics they used to "limited collector release" in the early 90s will eventually be of enormous value to archaeologists in the future, too.

[awt]

Although this is a true statement it is not persuasive in that Bitcoin (unlike a special issue comic, or any other rare thing) has specific, meaningful properties (fungibility, divisibility, durability, etc.) that interact with the world according to well known principles (Gresham's Law, Lindy Effect, Theory of Computation, Network Effect, etc.) that must be shown not to apply in order to disqualify it as the best available store of value.

[tptacek]

https://tinyurl.com/Special-Pleading

[awt]

What principle is not being universally applied? Or do I misunderstand?

[tptacek]

Many of the ostensible characteristics of Bitcoin you've provided also apply to special-edition 1990s Marvel comics. The idea that a good needs to be "divisible" to be valuable is nowhere supported by evidence and easily rebutted by counterexample. Your argument is essentially handwaving: all sorts of terrible investments are "great for people with low time preference", in that they will have no value in the immediacy, and their only hope of profitable redemption is to hold until some unspecified, unpredictable future date.

Illiquidity is a bad thing, not an generally an indicator that something is an especially good investment.