[iexplainbtc]

Yep and that's Bitcoin's network effect. There is demand for Bitcoin. 2017 was the year of retail interest, 2021 is the year of institutional interest. It's easy to see that the price is now uncorrelated with the retail interest, using Google Trends as an example. [0]

> there is no particular reason to believe that people will be more willing to pay over $45k to update ledgers to indicate possession of a particular alphanumeric string in a couple of decades' time than they are now

Absolutely. Nobody can know with certainty what will happen but if you compare Bitcoin with something like gold you immediately realize that Bitcoin is better in any possible way. There is literally no reason to think that Bitcoin won't replace gold in terms of market capitalization (except for the 7.5% actually used in manufacturing) [1].

[0] https://trends.google.com/trends/explore?date=today%205-y&ge...

[1] https://www.statista.com/statistics/299609/gold-demand-by-in...

[notahacker]

> Nobody can know with certainty what will happen but if you compare Bitcoin with something like gold you immediately realize that Bitcoin is better in any possible way.

Again, this is cargo-cult nonsense. Gold does not take the electricity resources of a large country to render it secure and make transactions possible. People cannot vote for a greater gold supply or fork gold, or create an alternative gold which lacks the need to use the electricity resources of a small country to secure it but is in every other respect functionally identical. Gold is pretty to look at and can be made into jewellery, not intrinsically worthless. Gold's price might be pushed higher than that intrinsic value by interest in its use as a store of value, but it's driven by millenia of desire to possess gold as a status symbol and currency substitute across a vast array of cultures, not a 12 year bull run propped up by counterfeit dollars and increasingly unrealistic claims that it will replace currency. There is literally no reason to believe that Bitcoin will ever 'replace gold in terms of market capitalization'

[iexplainbtc]

> Gold does not take the electricity resources of a large country to render it secure and make transactions possible.

Except it does [0].

> Gold is pretty to look at and can be made into jewellery, not intrinsically worthless.

The first argument is laughable, the second is simply incorrect. Oil is intrinsically worthless. It's worth something only if you can turn it into fuel, plastic or some other product for which there is demand. Same goes for gold.

And although it's true that you can turn a piece of gold into a piece of jewelry that piece of jewelry will decrease in value over time unless it gains intangible value because of its history. Try buying a gold necklace and selling it the next day at the same value.

Nothing has "intrinsic" value. All value is relative.

[0] https://medium.com/@hillpot/bitcoin-vs-gold-which-hurts-the-....

[notahacker]

> Except it does [0].

That energy is used in production, not securing the existing stock of gold. With the very significant consequence for gold's "store of value" role that if environmental activists succeed in curtailing gold mining, gold owners would see their gold go up in value, not transactions becoming incredibly difficult and prone to fraud and a price crash. (But FWIW I'm not saying that gold mining to use as a "store of value" isn't also wasteful)

> It's worth something only if you can turn it into fuel, plastic or some other product for which there is demand. Same goes for gold.

I'm sorry to hear you find the aesthetic preferences of virtually every culture in history and the role they have played in promoting gold as a symbol of wealth laughable. You'd be surprised how much harder it is to enthuse them about the aesthetic properties of Bitcoins though.

And no, oil or gold is not "intrinsically worthless" because it is possible to use oil or gold for purposes other than exchange, and thus people value them for those use cases independently of beliefs about their future price.

> And although it's true that you can turn a piece of gold into a piece of jewelry that piece of jewelry will decrease in value over time unless it gains intangible value because of its history. Try buying a gold necklace and selling it the next day at the same value.

And yet gold necklaces of a given design are invariably more scarce in supply than Bitcoin! Almost like the demand side of the equation actually matters! Luckily, people do not buy gold necklaces solely because they believe gold necklaces will go up in price, and are not motivated to sell them as soon as they fear the price will fall in future. The same does not apply to Bitcoins, because unlike Bitcoins, people hold necklaces for the intrinsic pleasure of having a shiny necklace.

[iexplainbtc]

[flagged]

[notahacker]

> Safes and transportation equipment have to be built too.

Because gold will be worthless and useless if it is not possible to continue using as much energy as Argentina on a daily basis to build and maintain safes and Securicor vans?

> Meaning we could be using a lot of renewable resources that would otherwise be wasted to create and exchange value.

Because the world is famously short of use cases and storage media for electrical power? As I already pointed out, none of the energy used to mine new gold is essential (or even remotely helpful) to securing and transacting with the existing gold supply, gold mining being energy use is something of a moot point when considering possible advantages of holding gold instead.

> I don't and you took what I said out of context Of course aesthetic properties are important. But quartz is arguably "prettier" than gold in most cultures. Gold is scarcer. That's why only considering the aesthetics is laughable.

At no point have I even hinted at considering only the aesthetics, and no good faith reading of my arguments would conclude I did. I did, after all, include the clause "price is the interaction of supply and demand" in my opening post.

I noted that aesthetics were a factor creating demand for gold independently from its perceived resale value. You summarily dismissed this as "laughable". There was nothing substantive for me to "take out of context", but I'm glad you now agree that the intrinsic aesthetic properties of gold are important.

> Gold necklaces of a certain brand. Not any custom designed necklace. It's an important distinction

Yes. I am aware that brands exist. Sometimes brands even produce limited editions so "we'll know exactly how many [necklaces] are in circulation 10 minutes, 10 days, 10 or even 100 years from now", but even this doesn't guarantee their gold necklaces retain their value. The fact that scarcity of particular designs often does not make them more useful as a store of value than the less scarce raw material supports my argument not yours. Second hand necklace preferences are fickle, and financial instrument preferences even more so.

> You seem to be unaware of how many people hold Bitcoin just because they like doing so (think GME and WSB)

How's GME performed as a store of value since WSB pumped? It's just as scarce as it was 10 days ago, but apparently not guaranteed to go up after all...

And come to think of it, the "terms of it being an instrument against totalitarianism and governments in general" are not independent from BTCs potential for future exchange use. Certainly neither as independent from future use nor as widespread as people taking pleasure from things' intrinsic shininess.

[iexplainbtc]

> How's GME performed as a store of value since WSB pumped? It's just as scarce as it was 10 days ago, but apparently not guaranteed to go up after all...

I was simply responding to what you said earlier:

> The same does not apply to Bitcoins, because unlike Bitcoins, people hold necklaces for the intrinsic pleasure of having a shiny necklace.

It does, instead, apply.

[maclured]

> Oil is ... worth something only if you can turn it into fuel, plastic or some other product for which there is demand. Same goes for gold.

You clearly don't understand what "intrinsic value" means if you believe this. The very fact it can be fabricated into something of value gives it some intrinsic value.

[dang]

Please omit personal swipes from your comments, and please don't post in the flamewar style.

https://news.ycombinator.com/newsguidelines.html

[iexplainbtc]

> The very fact it can be fabricated into something of value gives it some intrinsic value.

That's a plain contradiction. Oil is valuable because there is demand for products manufactured with it. In a world where there's no demand for gasoline, plastic or any other derivative of oil the "intrinsic value" of oil is zero, which proves there is no such thing as intrinsic value that isn't relative to a market.

Just to be clear we're discussing commodities and not company stocks, for which there is a very specific definition of "intrinsic value", according to fundamental analysis at least.

I'm pretty sure you're the one who's confused, but ok.

[dang]

Please omit personal swipes from your comments, and please don't post in the flamewar style.

https://news.ycombinator.com/newsguidelines.html

[iexplainbtc]

Apologies @maclured. Thank you @dang!