[miki123211]

What value does gold produce?

Sure, there's some value there, you can use it to make gold-plated contacts or shiny things, but if that was the only use case, it wouldn't be nearly as valuable as it is now.

Gold is valuable because people think it is valuable, and the same hodls true for Bitcoin.

[rsynnott]

Gold is probably the closest conventional thing to bitcoin, yes, though it does have _some_ intrinsic value as an industrial material, which sets a floor. But yes, gold’s value is basically speculative, and you’re largely relying on a greater fool.

You also shouldn’t buy gold; over any long period it is almost guaranteed to massively underperform the markets. If you had bought gold at its 1980s peak, you would have been down in real terms ever since; adjusted for inflation it has never reached that value since, and may never do. While you can say that about some individual _companies_, of course, you would be hard pressed to find a major index for which that is the case.

[Mr_Minderbinder]

> If you had bought gold at its 1980s peak, you would have been down in real terms ever since; adjusted for inflation it has never reached that value since, and may never do. While you can say that about some individual _companies_, of course, you would be hard pressed to find a major index for which that is the case.

The Nikkei 225 comes to mind. It only broke its 1989 peak last year.

[lanstin]

You really don't want a financial crisis in banking. All those regulations that crypto folks want to get rid of keep things like what happened to Japan in 1990 from happening with more regularity. Even 2008 in the US was painful and very long recovery, and mortgages were a smallish part of the overall economy.

[joshlemer]

The claim that we are disagreeing with is that Bitcoin is meaningfully different from any other investment in a way that makes it a Ponzi Scheme. I'm not trying to persuade anyone that it's a good investment, just that it isn't a ponzi scheme any more than gold, oil, real estate etc is.

[rsynnott]

I don’t think bitcoin is a deliberate Ponzi scheme, but it does have Ponzi scheme-like elements, in particular the absolute dependence on a greater fool to take it off your hands, with value _purely_ being based on what other people imagine it to be worth (ie not backed by any intrinsic value). Gold, yeah, isn’t a million miles away from this, either (as I mentioned previously, historically it is a _bad_ investment) though it does have the benefit of a few millennia of cultural cachet, increasing the chances that there’ll be a greater fool along soon.

Oil and real estate are totally different, though investment in oil in particular _is_ rather speculative; you’re betting on future real demand, but that demand is at least, like, _real_; there are obligate buyers of oil, almost no matter how high the price goes. Real estate, as I previously mentioned, produces value in terms of either rent or not having to pay rent.