Gold has a commodity value above zero. It’s used industrially. Even if everybody decides it’s not worth its precious metal value, it’s not worthless. Bitcoin has zero intrinsic value. None.
Which makes it better. Using gold as a store of value is inefficient. Only 11% of gold is used industrially, 89% of gold is literally wasted in financial games where bitcoin or any other fiat store of value with low supply inflation could be used instead.
Would she be happy to wear a necklace that appeared identical to gold to the naked eye, but anyone with a $10 instrument could demonstrate was not gold but something relatively worthless? If so, I have something I would like to sell you that your wife would really love.
It's the look. You also get resin / rock / clay / steel / ... (anything really) jewellery. It's not just about the price. And even then, a jewelry-sized gold piece is quite cheap.
Yes, using gold as a store of value is inefficient. You would generally expect returns worse than global equity markets over any significant period of time. You are at significant risk of _losing_ most of your money (adjusted for inflation, gold has never returned to its 80s peak, and was _much_ lower for most of the last 40 years). ~No-one should be investing in gold.
And bitcoin is even _worse_ than gold, on the fundamentals; gold does have at least have that bit of intrinsic value (plus a few millennia of cultural cachet). Bitcoin has _nothing_.
Industrial uses of gold aren't the only uses of gold. Like it or not, jewelry (among other decorative objects) containing actual gold is an enduring status symbol that is hard to 100% fake, and there is quite a large amount of the world's gold that is used for decorative purposes.
It's not only almost 100% speculation, it doesn't have much history track record.
Crypto bros need to understand that they aren't the first people to discover a speculation market, and just because they can dream of utility doesn't mean they test if the world wants to treat it as a reality. What they're doing is, from a financial perspective, boring and in many cases outdated.
That's a stupid argument. When someone finds some niche applications of crypto currencies in payment services, or something like that, it's economic value is above zero. But what matters is how close the economic value is to the market value, not whether the economic value is literally zero or not.
Bitcoin holds 57% of total crypto value, Ethereum another 11%, some 15% is in centralized instruments like USDC or XRP, which are not really cryptocurrencies.
In addition to that, there are also 10.5 million altcoins (10000 new are created every day). But all of them together hold just 17% of crypto value. So you can, of course, create another millions of forks, but it won't make a dent in Bitcoin value.
Sure you can create 10 different blockchains but will those have "stable" value 10 years from now?
In China, it's nearly impossible to invest your assets without friends in the government. The government strictly controls conversion of their currency to non-Chinese currencies. As strange as this sounds, but with cryptocurrencies, you can export value from your country to something more stable.
Same goes for many south american countries.
I still wouldn't invest into Bitcoin or Ethereum but I live in the west where there is the rule of law and one can invest into a large variety of asset classes.
That's irrelevant. You can choose to speculate with literally anything, not just newly invented crypto currencies or gold. Historically people have speculated with tulips and countless other things. The problem is the missing economic value, not whether you can create similar things. It's irrelevant for the economic value of gold whether new elements can be created or not.
>When someone finds some niche applications of crypto currencies in payment services, or something like that, it's economic value is above zero.
No it isn't. My credit card has an intrinsic value of zero. It might even be negative due to the massive amounts of infrastructure necessary to run it, similarly to bitcoin. The value is in the networks surrounding it, not whatever method Visa uses to move the bits around, be it blockchain, databases, or whatever. And even then, Visa's value add is only a few points on the transaction. It's in no way a speculative asset and if Visa went away tomorrow forever, it would suck for maybe a month while we adjusted to using cash again. In the same vein, if bitcoin went away tomorrow, I wouldn't notice until reading a panicked article about it.
If the US dollar went away tomorrow, however, I'd be happy to have stocked up on ammunition and cured meats.
How much of gold value is honest commodity value and how much of it is speculative value? I think you will determine speculative value is something above 80%. If that is the case, then arguing that there should be a huge disrecepency between price of BTC and price of gold is intellectually dishonest, since 100% speculative value and 80% speculative value isn't THAT different.
>How much of gold value is honest commodity value and how much of it is speculative value?
It really doesn't matter. The honest commodity value is the same price as the market value. 60+ percent of new gold mined every year goes towards jewelry and electronics. The base price of gold is high due to demand, not due to speculation. Gold is pretty and pretty hard to find - thus the price goes up.
I agree about Bitcoin, but other cryptocurrencies like Ethereum or Solana have use as gas to power transactions on their respective networks. So it's interesting to see Vanguard nix those two as well and then say "We do have a lot of interest in blockchain, the technology behind cryptocurrencies. We believe its application to a number of other uses besides crypto will make capital markets more efficient, and we’ve been actively involved in research to use blockchain technology."
It does, but Bitcoin's transaction fees are just paid to the miners. On Ethereum they are mostly destroyed. Combined with the lower issuance of proof-of-stake, this means that the supply of ETH sometimes actually shrinks.
That makes ETH is comparable to shares of a company, where fees are revenue, new issuance to stakers is cost, and any net profit is paid out to ETH holders in the form of stock buybacks. You can calculate a PE ratio.
Yes, but BTC can only be used as gas to power the transfer of gas. Meanwhile, ETH can be used as gas to power the storage and indexing of information on world computer. If we're talking about creating underlying value, I feel like the former is tautological and latter has an application outside of itself.
True, but you can do a much richer set of transactions with Ethereum/Solana, like moving stablecoins and making collateralized borrows, including against real world (tokenized) assets.