[slg]

The "cryptocurrencies are really useful" argument is now equivalent to the "gold has intrinsic value" argument. Technically they are both right, but the current price is so out of line with the actual value generated by those use cases as to be basically irrelevant. Both derive the majority of their value from people purchasing it as an speculative investment.

[gtt]

Gold is (relatively) easy to store, transfer, hard to obtain, really limited supply -- the qualities that make commodity good money. Uselessness of gold is actually useful here -- transactions with it does not distort markets. Imagine if we used coffee beans as "gold" -- then changes in monetary velocity would impact consumers, who would be forced to stash it.

[slg]

So real estate?

[gtt]

Hard to transport.

[slg]

Sorry, the brevity of that comment apparently didn't convey my point well enough. Real estate is an example of what you theorized would happen with coffee beans. It is a useful resource that is also used for speculative investment. It is something everyone needs, but as a society we have decided its price should also always be increasing. This has a net negative impact on society.

Bitcoin existing doesn't stop people from speculatively investing in real estate, so I don't think people will just start speculating on coffee beans or something similar if Bitcoin goes away.

[waterhouse]

Would it be better if people poured loads of money into something useful as a speculative investment? Imagine if the price of, say, steel went up by a huge amount due to people hedging against currency. Or housing—I hear this has actually happened.

[slg]

The problem isn't the resource that is being used for irritational speculative investment. It is that irrational speculative investment happening at all. And for the record, Bitcoin investment is much less rational than gold investment.

[waterhouse]

And do you think the people making those irrational speculative investments will just stop if one of their investment targets is removed? I suppose a few might, but are those few worth it?

[slg]

Not completely, but to a certain extent, yes. Like that sibling comment stated, there are certain important qualities for a good speculative investment like being easy to store, transport, and hold. Remember the point early in the pandemic in which a barrel of oil actually had a negative price? That is because it was difficult and costly to actually have ownership over the speculative resource. Bitcoin being so easy to own and transport makes it a much more attractive speculative investment in comparison to gold, oil, or steel so more people participate in the speculation.