Bitcoin has intrinsic value like Gold but better?

[androyster]

A very close friend of mine wrote this but he wants to remain anonymous:

Thought experiment to free your mind - concerning question above.

if you were an alien and you came to earth and saw people 's dealing with gold coins you'd think  WTH is wrong with these people?   why is this shit a "store of value--something that has very little day to day practical use"...

and yet you'd see the following...

1. an entire company - big, multi billion dollar company...with many thousands of workers using very expensive machines and equip...to dig holes in the earth thousands of feet deep, dangerous nasty work...to extract a shit ton of ....rocks...

2. which are then brought to the surface and broken down into fine sand or whatever and then massive use of harsh chemicals such as mercury used to extract a few OUNCES of some yellow metal from the TONS of shit they dug up.

3. Then they'd pay guards to guard this gold...which would then be melted down into bars which then would be transported literally across the world - some turned into small coins that nobody ever even uses for transactions .

4. people would then stamp and enscribe symbols on the coin and then sell them to dealers - entirely different companies which carefully guard these coins...and sell them to...

5. Joe 6-pack...who forks over thousands of REAL useful fiat currency for ...then takes this gold coin and puts it in a dark safe for ....well, decades sometimes. And Joe feels rich...bc he has invested in this "store of value".

see how utterly crazy and impractical  that is? Its physical- yes. But it does nothing, it consumed massive amount of energy discover, pull from the earth, process, ship, and ultimately sell to Joe. And before you start with the ole "but it has industrial value!" --- that clearly is not what drives the price of gold. come on. the industrial usage of gold would warrant prob something like $50/oz...the rest is due strictly to scarcity , network of acceptance as a TOKEN of value, difficult to counterfeit, fungible, sturdy, and all that jazz....but the VALUE of gold IS its acceptance as something rare and requiring tons of energy /time to produce. THAT'S ALL. Period.   for example...if we discovered an absolute shit ton of new gold...say everyone dug a hole in their backyard and found 1,000 # of it...guess what? it'd no longer be dear and prized as a store of value.


Bitcoin is similar.... takes a shit ton of energy to validate, has no industrial physical purpose, is valuable solely bc of network effect plus all those same characteristics I mentioned about gold above- but improved upon. True- you cant HOLD it in your hand...but thats NOT what MAKES gold valuable...anymore than an ETF certificate or   computer entry on your TD Ameritrade account showing you "own" xyz shares of gold fund, etc etc.  BTC is better in many ways --- its more divisible than gold or USD ( 100M units per 1 BTC) , it can be transported to anyone on planet earth for a nominal cost within about 10 minutes, it requires no armed guards, insurance , safe, etc. It's a better unit of account, It cant be "destroyed" (sure it can be lost just as a coin can be or a $100 from your wallet), it cannot be counterfeited...and most importantly it cant be manipulated by say The Fed or some country administrator , etc. Also it cannot be inflated away...the total release schedule of BTC is public info. It never changes from its plan/program/design. It works as long as an internet exists. And yes it can be "stored off line"- requiring zero energy on the holders part.

It's valuable only bc it cant be faked , inflated, hacked, and it requires a shit ton of energy to produce.

all store of value things really are nothing more than a symbol proving that a bunch of limited resources (time and energy ) went into something. THAT IS what makes it valuable....humans like rare baubles ...rather that be seashells, gold coins, pieces of paper with dead president pics on them, small clear rocks(diamonds), Majic the Gathering cards, Picasso paintings , etc ....its what we do.

get it?

[ilovealtcoins]

Bitcoin is decentralized and exists on the internet, if you want to mine Bitcoin, you need to take the risk of mining Bitcoin. Every 4 years Bitcoin has an increased scarcity due to a 50% decrease in reward.
No government can manipulate or exceed Bitcoin the way they do with gold. So if you want to own Bitcoin, you can only invest in cool equipment to mine or buy into Bitcoin. That is the reason that Bitcoin increases in value so quickly.

[thirdkiller]

Gold and Bitcoin are different assets with different purposes. I don't think we should compare them.

[DannyHamilton]

Every 4 years Bitcoin has an increased scarcity due to a 50% decrease in reward.

Unless more Bitcoins are being permanently lost than are being "mined", scarcity is not increasing.  Bitcoins become LESS scarce approximately every 10 minutes due to supply inflation.  Every 4 years, the inflation RATE is reduced, but we don't end up with LESS BITCOINS. We just end up with MORE BITCOINS slower.

Eventually, some day in the future (maybe in a few decades?) the rate of new bitcoins coming into existence will be slower than the rate of bitcoins being permanently lost.  At that point, bitcoin will finally be deflationary, and will slowly become more scarce.

[Ucy]

I think what makes these things valuable to people is because they can do useful things for them, and the scarce ones increase in price due to their high demand.
You could turn a mere paper into something valuable if you could make it very useful to people, then scarcity of such paper would most certainly make its price increase if it can't be replicated.

[Marvelman]

Bitcoin has a higher potential for growth, it is faster, cheaper and more efficient than gold. It has an advantage over gold because it can also be used for transactions, is decentralized, does not have any government intervention, and, unlike gold, is imperishable.

Not just because it's scarce, but also because it has intrinsic advantages as a store of wealth, a medium of exchange, and a transfer mechanism.

[Poker Player]

Gold and Bitcoin are different assets with different purposes. I don't think we should compare them.

You can compare any two things as comparing is just finding similarities and differences and they are not so different. Bitcoin is gold 2.0, it's like what email is to mail.

-snip

I think that's too long and too imaginary to justify that Bitcoin is better than gold. Some reasoning is good, nevertheless. Bitcoin is simply much easier to store and transfer, and much more difficult to confiscate, among other reasons. There is a long debate that Saylor and Frank Giustra had recently, quite interesting. I've seen a snippet and for me Saylor is winning but maybe I'm biased:

Bitcoin vs Gold - The Great Debate with Michael Saylor and Frank Giustra (Stansberry Research)

[BrewMaster]

first of all things have value because we say they have value. it is like a contract. if humanity decides one day that cat shit has value, then it has value.

secondly the utility comes in. you can't get everyone to accept that cat shit has value, but if something has actual utilities or characteristics that would be deemed worthy then it gains value.
take gold. in 700 BC gold was scarce, it was shiny, it didn't rust like iron, it was durable and pretty. so it was used as currency when they first created the "coins".

its the same with bitcoin. it has an excellent utility, it offers people worldwide a way to be their own banks. that will give its intrinsic value. the more people adopt it the higher that value is going to get.
the way it is extracted is just a characteristic of bitcoin that is the way to ensure the security.

[Chato1977]

Bitcoin is a good choice for investment. The storage value is not allowed to be doubted. Its value will get higher and higher. You can buy a little and save it.

you can count on that Higher and higher if you are willing to take a Long term holding but if you are into Daytrading or short term ?then best to reevaluate your position because you might end up losing.

[odolvlobo]

if you were an alien and you came to earth and saw people 's dealing with gold coins ...

That story was told by Warren Buffet many years ago:

[Gold] gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.

[MusaMohamed]

Economics of Bitcoin: is Bitcoin an alternative to fiat currencies and gold?

I don't consider Bitcoin as alternative for fiat currencies or gold. They are co-existing and will be used by different people. People who love Bitcoin will use Bitcoin. People who love fiat currencies like Warren Buffet will use paper or polymer fiat. People who love fiat but want to have more convenience with digitalized fiat will use CBDC. Gold has big communities in Asian nations.

Bitcoin is better than Gold because its supply is finite and you can bring it everywhere.

[Erdogan]

BTC has its own advantages but we are not in a position to compare it with GOLD. Gold is universally accepted asset and is more mature then BTC. Most importantly gold is accepted by all governments of the world.

[Kelvinid]

To answer with this, I take both of them, they are valuable and it remains valuable in future that people will become crazy buying this stuff. 
I'm not sure if someone will tell us that WTF are we doing...we are buying Bitcoin because we believe that it can give us profit it is just like what we do with Gold before. Maybe alien people can tell it as they never know about this, but not for normal people. 

[Ucy]

One of the main problems with gold being used as store of value, as money, plus the industrial uses by the entire world is the sustainability. You can't sustain the production of something as scarce  as that for the huge world population without harming the environment. Could even cause war/conflict because you'll have to keep digging wherever it can be found to satisfy human insatiable lust for the precious metal.

[Hughes_Ryan]

What has been said about bitcoin is digital gold. That is not an exaggeration. I think bitcoin is still on a mission and the chance to overtake gold is huge. Although the present is not enough, the future is possible. if the next scarcity in the next 5 years. We will see bitcoin surpass the value of gold. Both represent property, but the purpose of possession and use is different.

[nisya]

The best thing about bitcoin is you do not store the physical form of bitcoin than if you have gold, so you do not have to worry if people will try to steal your bitcoin. You can use a hardware wallet to store your bitcoin or use a mobile phone or other software wallets. I am sure people will not know how many bitcoins you have unless you tell them. We can avoid being the victims because we do not share with others that we have bitcoin. As long as we can hide our bitcoin, we will be safe, which is why bitcoin will have better benefits than gold. But unfortunately, people who already knew gold will not easily invest in bitcoin and need to get enlightened about bitcoin.

[Woodie]

The thing that makes gold relevant even in this day and age is its considered a precious metal which has shown and held a stable value of several decades and still going strong...that's reputation and experience the banks treasure and want this going.

And honestly I think people who are more attached to gold are likely not to move to bitcoin has this might make it obsolete with time, which is why governments around the world try to slow down the adoption process

[sly859]

A very close friend of mine wrote this but he wants to remain anonymous:

Thought experiment to free your mind - concerning question above.

if you were an alien and you came to earth and saw people 's dealing with gold coins you'd think  WTH is wrong with these people?   why is this shit a "store of value--something that has very little day to day practical use"...

and yet you'd see the following...

1. an entire company - big, multi billion dollar company...with many thousands of workers using very expensive machines and equip...to dig holes in the earth thousands of feet deep, dangerous nasty work...to extract a shit ton of ....rocks...

2. which are then brought to the surface and broken down into fine sand or whatever and then massive use of harsh chemicals such as mercury used to extract a few OUNCES of some yellow metal from the TONS of shit they dug up.

3. Then they'd pay guards to guard this gold...which would then be melted down into bars which then would be transported literally across the world - some turned into small coins that nobody ever even uses for transactions .

4. people would then stamp and enscribe symbols on the coin and then sell them to dealers - entirely different companies which carefully guard these coins...and sell them to...

5. Joe 6-pack...who forks over thousands of REAL useful fiat currency for ...then takes this gold coin and puts it in a dark safe for ....well, decades sometimes. And Joe feels rich...bc he has invested in this "store of value".

see how utterly crazy and impractical  that is? Its physical- yes. But it does nothing, it consumed massive amount of energy discover, pull from the earth, process, ship, and ultimately sell to Joe. And before you start with the ole "but it has industrial value!" --- that clearly is not what drives the price of gold. come on. the industrial usage of gold would warrant prob something like $50/oz...the rest is due strictly to scarcity , network of acceptance as a TOKEN of value, difficult to counterfeit, fungible, sturdy, and all that jazz....but the VALUE of gold IS its acceptance as something rare and requiring tons of energy /time to produce. THAT'S ALL. Period.   for example...if we discovered an absolute shit ton of new gold...say everyone dug a hole in their backyard and found 1,000 # of it...guess what? it'd no longer be dear and prized as a store of value.


Bitcoin is similar.... takes a shit ton of energy to validate, has no industrial physical purpose, is valuable solely bc of network effect plus all those same characteristics I mentioned about gold above- but improved upon. True- you cant HOLD it in your hand...but thats NOT what MAKES gold valuable...anymore than an ETF certificate or   computer entry on your TD Ameritrade account showing you "own" xyz shares of gold fund, etc etc.  BTC is better in many ways --- its more divisible than gold or USD ( 100M units per 1 BTC) , it can be transported to anyone on planet earth for a nominal cost within about 10 minutes, it requires no armed guards, insurance , safe, etc. It's a better unit of account, It cant be "destroyed" (sure it can be lost just as a coin can be or a $100 from your wallet), it cannot be counterfeited...and most importantly it cant be manipulated by say The Fed or some country administrator , etc. Also it cannot be inflated away...the total release schedule of BTC is public info. It never changes from its plan/program/design. It works as long as an internet exists. And yes it can be "stored off line"- requiring zero energy on the holders part.

It's valuable only bc it cant be faked , inflated, hacked, and it requires a shit ton of energy to produce.

all store of value things really are nothing more than a symbol proving that a bunch of limited resources (time and energy ) went into something. THAT IS what makes it valuable....humans like rare baubles ...rather that be seashells, gold coins, pieces of paper with dead president pics on them, small clear rocks(diamonds), Majic the Gathering cards, Picasso paintings , etc ....its what we do.

get it?


[/quotGood Idea

[Artemis3]

NOTHING has intrinsic value. Value is subjective.

What good is gold for you when you are in a desert while dehydrating?

You will only understand bitcoin when you study the Austrian School of economy.

[dota2bestplayer]

In fact, Bitcoin and gold have some of the same characteristics. They are separable. The transaction amount of Bitcoin can be 1 or 0.1, and so can gold. Both have stability and scarcity, and both Bitcoin and gold are decentralized. People's consensus has been formed. People believe that it is valuable and therefore valuable. Some people will say that Bitcoin is virtual, but the value of gold is not its own value. It is also the value given to it by people, and it is also the standard by which countries measure prices. Bitcoin has the same attributes as gold, but it can be free from government control.