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by RemoteWorker
4159 days ago
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Ah, the good old "if no one uses it as a currency it will die, so you have to spend it!" argument. The answer is that we are using it: as a store of value. But every time we explain this, detractors will invariably reply either that it's not a good store of value because it went down in <insert cherry-picked timeframe>, or that saving is bad for the economy because central bankers say so. For these sort of questions, simply compare it to gold: Is it dying because "no one is using it" to buy groceries? Does it sometimes go down, and yet a lot of entities, including central banks, consider it a great store of value? |
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For something to work as a store of value, there's got to be some other aspect of it that has a value/utility in another way. For gold this is it's resistance to corrosion, millennia of history, for the usd it is its broad acceptance as a medium of exchange, I could even store value in something like canned goods, or toilet paper, or firewood, or soap, or solar panels...
With bitcoin the case could be made that the structure of its network is this other side of the coin, intrinsically valuable aspect of it. That might bear out and more people might gravitate toward that, but that is far from a given at the moment. (do keep in mind that this aspect of it is endlessly replicable open source software, so it really boils down to the community, brand, ethos... that is built up around a given cryptocoin network. Another differentiating aspect I suspect we will see more of is innovative distribution/mining models. And then the other thing that establishes a currency is that it has to be the sole coin of the realm in a given realm/economy no matter how small, which we have seen you could say in the darkmarkets, but I think something along these lines but a little more 'legit' is what is really needed to see a cryptocoin take off.)
So it's my view that by saying it is being used as a 'store of value' before it has established utility/gained currency in a significant way in other realms is putting the cart before the horse. And that's why I'm asking if all the people that are just sitting on it, so sure it's going to take off in one way or another, how is it going to take off? What is it going to being used for? Also, that sounds less like a store of value and more like a calculated risk/speculative purchase.
As mentioned in my previous comment, I also see its current primary use as a 'store of value,' i.e. a land grab in attempt to profit from speculative future uses, as being a hindrance to its use in any of those speculative future uses.