[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.

[eric_cc]

It’s “buying power”

[peoplefromibiza]

  gift card
  noun [ C ]
  uk /ˈɡɪft ˌkɑːd/ us /ˈɡɪft ˌkɑːrd/

  a card that can be exchanged in a shop or on a website for goods or services of the value that is printed on it

it's literally the same thing as cash, a check or a voucher.

it is also entirely dependent on the same external factors of cash, vouchers and checks: inflation, exchange rates, etc.

because it's simply a certification that you can spend that amount of money, in that currency, in that shop and that's it.

Also: a Patek Philippe is buying power as well

everything that can be exhchanged for something else can be defined as "buying power"

but an American Express or a gallon of water in the desert are buying power too.

the definition is too broad to be useful.

[eric_cc]

I’d counter that buying power is the only metric that matters. All these abstractions of buying power may distract and distance you from this most important metric - often to the benefit of companies and nation states.

[peoplefromibiza]

> I’d counter that buying power is the only metric that matters

I'd counter that protection of buying power over long periods is what really matters.

My CD collection had an enormous buying power in the 90s, now it's almost worthless.

I reckon one cannot rely on buying power of CD or DVD or VHS.

> often to the benefit of companies and nation states.

In this regards people, companies and nation states interests are usually aligned, i.e a stable currency that provides protection against wild fluctuations and retains its buying power and its usefulness.

Unless you are an enemy of the people, I don't see why someone should not like it.

[eric_cc]

Good points. Consider all the different investment instruments out there. Abstractions on top of abstractions on top of abstractions of buying power. Yes, a stable currency is desirable. But volatile abstractions are also beneficial to powerful entities.

[steveBK123]

its a loan to the card issuer

[peoplefromibiza]

an interest free loan, that's why it has "gift" in the name.

It works the same way as lending the money directly to a person, gift cards are simply more convenient to handle and are safer than cash, but other than that it's just a gift in the form of cash, no matter how many intermediaries are between the sender and the receiver, the input and the output will always match exactly.

If, for example, I give my friend Alex $20 to buy something for his little daughter but Alex uses it to bet on a football match and loses it, Alex has to take some money from his pocket and then buy the gift with his own money. Which is not different than saying he spent his money on the bet and bought the gift with the money I gave him.

If otherwise Alex wins, he will still buy the gift, but he will also have increased the initial sum by an x% which he can keep (or maybe try his luck again)

Buying a gift card is the same process, the company holding the money at one point has to give back something of the same exact value, it doesn't matter what they do with the money in between, what matters to the sender and the receiver is that the amount printed on the card is fully available at the check out (which is just lik getting the amount in cash and then paying with that)

[steveBK123]

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

[AnthonyMouse]

Some of them do. Suppose the issuing company gets into some trouble and people fear they won't be able to make good, but then later they take care of it.

For that matter some government-issued currencies do that too.

[eric_cc]

when you say up and down you are referring to buying power. And yes, the buying power of a $20 grocery store gift card has gone way down the last few years. Consider how much milk and eggs you could buy in 2018 compared to today.

[steveBK123]

Gift cards are tethered to the dollar, with a discount, because they are essentialy unsecured loans to the gift card issuer.

I also would point out that very few if any people would point to gift cards as a durable store of value and new world currency.

[eric_cc]

Totally agree. I only meant to illustrate that all abstractions of buying power fluctuate in their ability to secure basic needs - food, water, shelter, supplies.

[steveBK123]

And the "tethered to the dollar" part is important. They are basically liquidity/risk discounted dollars, as are many of these examples of "buying power".

No one is tethering their Rolex price to BTC. No one is tethering their home purchase budget to BTC.

Why? It's all tethered to your income, in dollars, and your savings presumably mostly in dollars as well.

Even "jug of water in the desert" is tethered more to dollars than BTC because what are you more likely to have in your pocket, and why?

Dollars are tethered to the government taxing us in dollars, so we get paid in dollars, and our government has nukes & aircraft carriers and such. Everything then gets tethered to it because thats what we get paid & save in.

BTC is tethered to nothing, and there is no natural value you can back into such that you can justify any price level of it.

Other than its usefulness as "untraceable" (what people think, but not what is true.. it is more like "unblockable") cash, and for money laundering/drugs.. it is a trading instrument for punters.

[eric_cc]

> No one is tethering their home purchase budget to BTC.

Whether you tether the purchase of a home to bitcoin or the US dollar is more a state of mind, tribalism, etc. Both the US dollar and bitcoin have no intrinsic value. They both derive value from a human belief system - I believe they have value and that others believe the same. They are both just networks in that sense.

> Even "jug of water in the desert" is tethered more to dollars than BTC because what are you more likely to have in your pocket, and why?

This is silly. But to add to the silliness - you could have bitcoin in your brain. Just memorize your words.

> Dollars are tethered to the government taxing us in dollars, so we get paid in dollars, and our government has nukes & aircraft carriers and such

Now THIS is truly different. The US dollar has violence on its side. I concede that bitcoin is a peaceful currency - at least thus far. Hopefully it stays that way.

> Other than its usefulness as "untraceable" (what people think, but not what is true.. it is more like "unblockable") cash, and for money laundering/drugs.. it is a trading instrument for punters.

This is political bias and parroting talking points of anti-bitcoiners. While your other points are thoughtful, this is not. Why not just call bitcoin a butthead?