[wpietri]

Not at all. From a market perspective, Bitcoin is not scarce in the same sense that gold or diamonds are scarce. If people want to buy into cryptocurrency, Bitcoin is far from their only option. As this whole discussion around Ethereum makes clear, other cryptocurrencies are viable. As I mentioned earlier, other Bitcoins are clearly viable.

Yes, the number of Bitcoins in a given fork has a limit, assuming whoever controls that for keeps it that way. But that doesn't matter much if market demand is such that other forks or entirely new coins become viable.

[keymone]

it's like saying gold isn't scarce because there are other metal compounds. you're not making sense at all. if you want to interpret scarcity this way - feel free, but be informed that pretty much everyone else will look at you weird.

[wpietri]

No, it's like saying gold isn't scarce because anybody with a bee in their bonnet can launch "Gold 2.0" and create their own supply. Which is definitely not true for gold, but is demonstrably true for cryptocurrencies.

I grant that crypocurrency fans will look at me weird, which I'm fine with. But economists (and most others) won't, because they understand that substitutability [1] affects scarcity.

[1] https://en.wikipedia.org/wiki/Substitute_good

[keymone]

Well if you believe any fork of bitcoin is bitcoin I have lots of cheap bitcoin to sell to you.

There’s an attribute that you can’t substitute - chain difficulty. I’ll let you figure out the rest.

[wpietri]

Again, from a marketing perspective, it's not clear that matters. For a great number of cryptocurrency "investors", they're just buying magic beans. A fine piece of evidence comes from CNN today that digital currencies are effectively substitutable: https://www.cnn.com/2020/12/03/investing/bitcoin-ethereum-xr...

As Bitcoin itself proved, plenty of people will buy into a commodity because it's new and hot, and not because of any fundamental analysis of its value. In that sense, Bitcoin is not in any way scarce.

[keymone]

How many more years of clear correlation between value and chain difficulty must pass for you to recognize that there’s something in there?

Also, bitcoin is scarce because it’s hard to get more of it, what the hell is your definition of scarcity? It seems to change from one comment to another.

[wpietri]

Bitcoin has not proven market value beyond a speculative instrument and a vehicle for financial crime. In particular, it has failed in its original goal to be peer-to-peer electronic cash. I hope real value emerges someday, but after a decade's track record, I don't expect it.

My definition of scarcity is when the people in the market to buy cannot easily get more of the thing that they want. For people just wanting to speculate, other cryptocurrencies are substitutable. And given how easy it is to start a cryptocurrency, the supply is effectively infinite.

And just to be clear, it's not Bitcoin in specific I'm concerned about. I think the same thing about all the cryptocurrencies, although I have more hope for other ones to eventually evolve toward delivering value.