[mabcat]

You do need to separate medium of exchange from store of value. Real estate is useless as a currency while being the primary store of value for most people. Most of your objections also apply to real estate: can't know how much wheat a house is worth, houses are notoriously illiquid, price discovery is difficult and quite opaque, the sector is rife with misrepresentations. I wouldn't go so far as to say fraud, but where does "real estate agent" sit on those polls of "most trusted professions"? Houses aren't even fungible!

And if anyone thinks BTC/ETH transactions are slow and expensive (me!), around here the gas fee on real estate transactions is ~5% with a 6-month processing time...

[darth_avocado]

You can live in a real estate investment or grow food on it or run a business in it. Bitcoin is a bunch of 1s and 0s that is same as a blank canvas hung in museum and is priced at $20M. It is essentially useless, but people believe it’s worth something, so it keeps holding value. Until one day, it doesn’t.

[lbotos]

I'm not a bitcoin maximalist, but you have to acknowledge that in this day and age that your definition pretty much applies to USD as well. People believe it's worth something. And so it is.

[blackle]

USD holds value because the government says it does. The government holds authority because they have a monopoly on violence. Or, if your less pessimistic, it's because people believe in the government.

[chii]

> USD holds value because the government says it does.

so how do you explain dollarization of failed economies? Such as lebanon, or venezuela etc?

Surely, you're not saying that the US gov't somehow is exerting violence on another country to make the dollarization happen.

[HWR_14]

The people in Lebanon and Venezuela trust that the US government will continue to exist and that they will either meet with people who want to do business with it, or will meet people who assume they will meet people who will, etc. So they have value.

[AnthonyMouse]

So if people trust that Bitcoin will continue to exist and they will meet people who want to do business with it etc...

[steveBK123]

Exactly

To paraphrase a quote attributed to Stalin - how many divisions does Satoshi have?

[AnthonyMouse]

But then you have to explain why gift cards are worth something. The answer is, because someone will give you something for them.

Meanwhile there are a large number of entities that have already entered into long-term contracts denominated in cryptocurrencies and any of them would pay you something for it when they need to satisfy their obligations.

That doesn't mean the value never changes, but that's also true of government-issued currencies. That's what inflation is.

[peoplefromibiza]

> But then you have to explain why gift cards are worth something

gift cards are vouchers

You pay $30 to the store so that someone else can spend the $30 in that store.

It's a certificate, not a currency, not a store of value.

[steveBK123]

Do gift cards go up & down 50% in a year and have large transaction costs?

[thworp]

Yes, this is the key dimension of the "currency" front. But bitcoin "advocates" (a term I'll use for diplomatic purposes) say that within a context that implies that is somehow a low bar to clear or just a consquence of the monopoly of force or somehow morally questionable. But becoming something people trust (or at least have some amount of confidence in multiple dimensions in) is one of the most difficult things for any new asset class or medium of exchange.

Some of the main ways currencies and commodities get there are value stability (sticking within a certain band with <100% annual swings), wide acceptance and utility. After 10 years of many techno-smart people trying to engineer cryptos to become that we are nowhere near any of these promises being fulfilled.

[georgeplusplus]

I have to agree, fiat currency seems very similar to bitcoin. Its a manmade currency essentially that is backed by nothing.

Bitcoin appears to be the next phase of that manmade currency.

[hutzlibu]

In general yes, but with the difference that the dollar (or other "real" currencies) are encoded in law to have a value with the whole state backing it.

[polygamous_bat]

US Dollar has value largely because the United States government is legally obligated to accept it to settle debts.

[thworp]

Yes that is one small dimension of why the dollar is valuable. But a far bigger part is the fact that using dollars enters you into the US financial (and by extension legal) systems which has been far more stable, reliable and predictable than other systems over the last century. For a point of reference consider Switzerland, whose currency is a minor reserve currency and whose banking and legal systems are globally appreciated, despite the fact that they have no power projection and a tiny population in comparison to their financial markets. The Swiss central bank has even deviated from their usual stable policy since 2008 and yet still they see inflows.

[HWR_14]

Also, any debt in the US can be paid with dollars. They even printed "for all debts, public and private" on the bills.

[DylanDmitri]

Also the US government threatens (and occasionally delivers) military and financial harm on entities that refuse to use USD for certain transactions.

[eric_cc]

Now do the US dollar!

[peoplefromibiza]

I guess the difference is that you can live in a house. For the majority of people that's the real value.

Real estate market is also heavily (heavily) regulated, to the point that buying and selling houses require so much paperwork that it's not really convenient for scammers.

It's also quite stable, loans are secured by mortgages on the properties, I'm not sure anyone would accept bitcoins for the same purpose.

[thworp]

You sort of tipped around the main difference: Real estate is illiquid and intransparent sure, but it is a non-fungible productive asset, you can get people to pay you rents because they need precisely your building. There are no comparable income streams for bitcoin (outside of Ponzi "yield farming") so it is illiquid without any of the benefits of traditional illiquid assets.

[peoplefromibiza]

rent is due after you bought the property.

which entails a lot of the aforementioned paperwork and checks and law abidings.

if bitcoin could provide the exact same level of security, it could be used as an asset, granted it failed as a currency.

the problem is it was designed precisely to not adhere to the standards everyone expects from "old-school" transactions, hence its main purpose is speculation, and it's barely good at that right now.