[nofunphil]

Buying Bitcoin is becoming similar to buying gold. It’s a Store of Value. Why is gold an investment? Because it’s scarce and we have, as a society, decided it’s an investment. There may be nuances here, but that’s the basic idea. Bitcoin is digital gold. Most other tokens are similar buying fiat currencies which can help if you local fiat currency is hyper-inflating. But then some tokens give access to de-fi which a whole other rabbit hole.

[Erlich_Bachman]

Yep, store of value is actually a useful function for many indivudals and companies, and we are betting on that storing of value will become more and more valueable as we progress.

Storing of value is not just "hoarding", useless activity. It is an important ingredient in making many of the business processes and just things work in general. It is a very impotant function. And thus if we have tools that make that function work well, - they will be valueable.

And as it turns out, there aren't that many things that work well as a store of value. It's not like you can take any thing or instrument or contract or whatever else, and make it work as a store of value. In some sense, the ability to act as a store of value is scarce in itself. We already have some instruments, like gold, properties, land, etc. Stocks and ETFs and such are also kinda a store of value, but have a lot problems (but also other functions besides just storing the value). So yes, we welcome another way to store value, this market is by no means saturated as it turns out. Gold has it's own problems.

[allendoerfer]

If I am investing and seeking returns I will tolerate a certain level of risk and volatility, if they are justified by the returns I am getting.

If I want to store value, what I am looking to avoid at all costs is volatility and risk. That's why instituations are even accepting to lose a little bit of value in return for security by buying bonds from Northern European countries.

It's kind of in the definition of the word "storing": If you want to store water you won't put your bucket of water on to a race car, even though it might drive through a heavy rain.

[root_axis]

Cryptocurrency isn't actually scarce though, it may be "scarce-like" but the scarcity is an artificial property that can be arbitrarily changed, unlike gold's scarcity which is an unalterable property of reality.

[Erlich_Bachman]

In all practical senses it is scarce. It is the protocol and consensus of the people using it that makes it scarce. If you disagree, go ahead just make your own BTC and see how "easy" it is to convince other people to use it instead of BTC or some other mainstream coin. (Some people even tried exactly that...)

[root_axis]

You can't really know how easy it might be for me. For example, if my name was Vitalik Buterin or Elon Musk or even Donald Trump, I could trivially create my own cryptocurrency and a lot of people would use it.

[doggosphere]

Creating a new cryptocurrency doesn't make Bitcoin less scarce.

At worst your coin takes time and attention away from Bitcoin, and thus takes value. At best it outgrows Bitcoin, and grows the entire space.

But that's like saying you could build your own alternative to Facebook by whipping up some corporate partnerships and venture capital. Go ahead, we'll see which one wins in the long run.

[root_axis]

I did not say it would.

[ball_of_lint]

Sure - you can make another cryptocurrency if you want. That currency will not be bitcoin.

Some people tried this before by branching off the bitcoin blockchain. That was called bitcoin cash, and it failed.

Bitcoins, meaning not any cryptocurrency but just actual bitcoins, are scarce and will almost certainly remain so.

[root_axis]

I never said it would be bitcoin.

[ric2b]

But it still wouldn't change the scarcity of Bitcoin.

[root_axis]

I did not say it would.

[kinakomochidayo]

It's easier for those with the funds, and connections to manipulate, and censor discussions about other forks - and some pro-Segwit people did exactly that with the 2017 hard fork, like on /r/bitcoin, bitcointalk, etc.

[modeless]

Bitcoin is scarce; the consensus mechanism makes it prohibitively difficult to change the supply. It's barely even possible to do widely desired protocol upgrades; anything more is simply out of the question. The scarcity is far more secure than any fiat currency.

I think it would actually be easier to increase the supply of gold via asteroid mining than to increase the Bitcoin supply. That doesn't require consensus and will probably happen someday.

[root_axis]

> the consensus mechanism makes it prohibitively difficult to change

This is a cultural property of the community, not an intrinsic property of bitcoin. If Satoshi signed a PGP message with a compelling call to alter the scarcity it would likely happen; maybe you disagree, but the point is that it's very possible to change the scarcity because it's a distributed computer program.

[modeless]

The fact that it's a "cultural property of the community" doesn't make it easy to change.

Bitcoin is not just "a computer program", it is a program and a blockchain. The same program with a different blockchain is not Bitcoin (there are plenty of those out there). Adding more supply to the Bitcoin blockchain would require large numbers of people to work against their own interests, decimating the value of their own infrastructure investments and bitcoin holdings.

It would be much, much more difficult to change Bitcoin than e.g. the supply of dollars or euros which are considered scarce enough for most purposes by most of the world. And, I contend, even more difficult than changing the supply of gold via asteroid mining. I doubt that even the second coming of Satoshi would be enough to do it (and I also very much doubt that Satoshi is still alive, or that he would want to if he was, considering his known political/economic stances).

[root_axis]

The point is that the scarcity can be trivially changed if certain people decide that it should, which isn't true for things that exist in the real world like gold. Norms shift over time and your suggestion that it's unlikely to change is your opinion based on cultural analysis, not something that can be proven to be true even in principle.

> It would be much, much more difficult to change than e.g. the supply of dollars or euros which are considered scarce enough by most of the world

This thread is about gold not fiat money, obviously the scarcity of fiat money can change, that's the whole point of fiat money.

[nmlnn]

> can be trivially changed if certain people decide that it should

This is simply not the case - see 2017 bitcoin cash fork or Segwit2X push. At the end of the day money is a human invention, meant to facilitate value exchange between humans. So it requires consensus between the users of the money, if some fraction want to change the rules they are free to.

We went for something we found in nature with properties that were pretty good for that, but with some downsides (not absolutely scarce, difficult to transport, easy to steal) to something created specifically for the purpose.

[modeless]

You can't "prove" that Earth's gold supply won't increase with asteroid mining either. We can disagree on the relative difficulty of asteroid mining vs. changing Bitcoin's consensus rules, but you must at least concede that they are both possible.

[itsoktocry]

>Bitcoin is scarce; the consensus mechanism makes it prohibitively difficult to change the supply.

A single bitcoin is infinitely divisible, unlike most physical assets. How does that affect scarcity?

[modeless]

Bitcoin is not infinitely divisible. The smallest unit is called a Satoshi.

[tiwprueowut47]

Gold’s scarcity is certainly not unalterable. Gold can be destroyed, increasing its scarcity. Plus we already have the technology to create gold out of other elements in a particle accelerator, decreasing its scarcity. That process happens to be prohibitively expensive, but there is no guarantee it remains so. The scarcity of cryptocurrencies and gold both depend on the actions of other people.

[root_axis]

Yes, it's possible to destroy or transmute gold, but as you already stated, it's prohibitively expensive thus with respect to scarcity it might as well be impossible. Yes, that might change in the future but there is no reason to believe that it will.

[Sargos]

You just explained to yourself why Bitcoins supply is fixed and can't feasibly be changed. It was a well made argument, good job.

[root_axis]

No. Your belief that the bitcoin community will never choose to alter the supply of bitcoins is not the same thing as the properties of physics which constrain the practical transmutation of gold.

[hapticmonkey]

Any change to bitcoin's supply algorithm requires a hard fork of the blockchain. People have done it before but those forks are considered worthless by the community.

You're right that it is a community belief. If enough people were convinced that supply should be increased, they could fork the blockchain and move to the new chain. The change in supply would alter the price appropriately.

But that's no different to the community belief that it has any value to begin with. If everybody was convinced that gold was worthless (outside of its practical industrial uses), it would cease to be a store of value too.

[itsoktocry]

>It’s a Store of Value

A 10 year old asset that has wild price fluctuations is a "store of value"? By what measure?

[qes]

As long as you waited 4 years between storing value in Bitcoin and removing it you _always_ got more value out, no matter what point in time in Bitcoin's entire history you stored it.

And not just a little bit more value..

Is an index fund a store of value? Would you recommend someone store their value there if they wanted it back out in less than 4 years? Gold? Property? Or would you suggest those stores of value are only suitable for longer time frames? How much more value does someone who stored it in Bitcoin 10 years ago have now?

[mrlala]

Honestly that is just bs.

Gold is a physical thing that is scarce and has real uses other than being treated as 'money'. We have only mined a cube with 28 meter sides of gold from the dawn of time! It's useful- that's why it has value.

If it wasn't useful (pretty for jewelry and an essential industry product) then it would be fairly worthless.

You say crypto is scarce? The scarcity is artificial, and you can create an infinite number of crypto currencies...

[Erlich_Bachman]

They already have created an infinite number of them. Nobody is buying them. BTC and a couple of others have the property of being valueable (which is decided in consensus by the users in the real world), while also being scarce. Nobody cares if some shitcoin on the bottom of coinmarketcap is not scarce. It is irrelevant.

So yes, useful cryptocurrencies are scarce.

[the_gastropod]

> BTC and a couple of others have the property of being valueable

I'm not sure this is a rock-solid argument. Ponzi schemes also have value (until they don't). MLM's are often massively valuable, too. But most people would acknowledge they're little more than scams to the huge majority of people "invested" in them.

[postingpals]

A store of value is just one aspect to what makes money, money. It also has to be a medium of exchange and a standard of value. Bitcoin's value changes so wildly that it cannot be a standard (right now) and no one uses it to buy things.

Everyone is investing in bitcoin on the promise that its going to be so much more useful than dollars, in the hopes that they will make a lot of... dollars? Do you see the contradiction? If they think it's going to be so much better than dollars what are they going to do with their long term investment dollars if, in the long run, bitcoin surpasses them?

Don't use economics terms to explain the usefulness of bitcoin when economics itself disagrees.

[Erlich_Bachman]

Your logic stumbles when you consider gold. "no one uses it" either to "buy things", and yet it is valueable and has been so for eons. Store of value is a very important function in itself.

[postingpals]

The gold standard was abandoned precisely because it was inferior. It was pretty useful up until early 20th century as a medium of exchange too. People used to use gold coins to buy things, didn't they?

[Erlich_Bachman]

Now it's not, and yet it's still valueable.

[notreallytrue]

Honest question: in 20 years would you prefer to own a 21 milionth of bitcoin (1 bitcoin) or 21 milionth of gold (~8kgs of gold)?

Not thinking about the value of it, but of its future usefulness as value store and as mean of payment

[ZephyrBlu]

Bitcoin 100%, because of the optionality and network effects.

I don't believe you can separate the value of Bitcoin and it's usefulness because the more valuable Bitcoin is, the more useful it becomes.

The more people who hold Bitcoin, the more scarce it becomes and therefore the more valuable it becomes. In 20 years, Bitcoin could go to 0, or become a widely used currency and skyrocket in value.

Once the number of Bitcoin holders reaches equilibrium then the value would remain stable, but we are definitely not at that point yet.

[themodelplumber]

> Everyone is investing in bitcoin on the promise that its going to be so much more useful than dollars

I doubt this is true in every case, maybe even most cases. Though this sentiment does seem to become more rigid toward the core of the crypto community, a huge swath of other investors are playing price action. There are tons of technical traders in crypto, and they tend to care much more about MA deviations, gaps, pennants, and candlestick forms than what's going to replace USD.

You can also think of it as a play by (people who don't have as many concerns about the dollar) off the fears of (people who are afraid about the future of the dollar).

IMO there is a lot of room in a speculative ecosystem for non-value, non-traditional-economics, and even hugely irrational viewpoints. They can all meet with success by using their own sets of strategies.