| What is money? Commodity, a measure of value, or a record of a debt. Sometimes all three. In this article, Dalia has the commodity view towards money, gold, and by extension bitcoin. In this paradigm, cryptocurrencies are collectibles. One great use case is as an escrow. I'm dubious of the store of value use case. Bitcoin is just a currency. Whereas gold bullion is minted into coins, electricity is minted into bitcoins. The cost of production is only loosely correlated to the market (strike) price. What gives money its value? A MMT-like theory is that fiat currencies have their well defined value because government accepts them to pay taxes. I'm a bit more cynical. I think money, fiat currencies like the USA dollar, has it's value established at the point of a gun. That dollar represents the military might of the USA and that government's insistence that you agree. What backs the value of bitcoin? Anything tangible? Nope. Just everyone's shared belief. Per Random Walk Down Wall Street, it's just castles in the sky. And like all bubbles, that belief system pops in a panic. For rich people like Dalio, collectibles like gold, art, and real estate are probably a good idea. After the crash, someone somewhere will probably accept those collectibles, those assets, for payment or collateral. In any scenario where gold or art will be used as collateral, who's gonna accept bitcoin? |