Viewing a response to: @tarazkp/re-markkujantunen-fwoqe
Bitcoin's utility would be as a digital store of value capable of functioning as a collateral to everything else. It's got the same properties as gold plus some new ones that make it better. Custody is a major concern for large financial institutions but cryptographic methods exist to to make that secure. That was covered in an earlier conversation between Raoul Pal and someone else whose name I don't recall now.
author | markkujantunen |
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The problem with it as a store of value is that it isn't very good short-term, depending on when you buy - so this usecase is like what I was saying with the bubble thing, gotta look long on it. Probably not as long as industry building, but still a fair way. Gold has far more stability because it is out of the ground and it is very hard to get more, it has already established its position. I think bitcoin will eventually do similar - but no time soon. ;D Posted Using [LeoFinance <sup>Beta</sup>](https://leofinance.io/@tarazkp/re-markkujantunen-4ngncs)
author | tarazkp |
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Bitcoin is better than a store of value in the short term. It's a rapidly appreciating asset still undergoing adoption, which advances in waves whose length is four years. Gold has more stability because it's a more mature asset, not because mining it is harder. Gold's stock-to-flow ratio is about 55 (it takes that many years to double the current gold stock with the current flow), which is higher than Bitcoins at the moment, which is 34. But what's special about Bitcoin is how its stock-to-flow ratio doubles every four years. Bitcoin's stock to flow ratio will overtake gold's in 2024. By that metric, Bitcoin will exceed gold in fundamental value.
author | markkujantunen |
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As said, it depends when you buy. Buying at the top of 2017 saw a decrease from 20 down to 4ish if I remember correctly, an 80% loss. An investor would have to wait a full 3 years to break even again. Although, they would be up now. >Gold has more stability because it's a more stable asset, not because mining it is harder. I didn't say mining it is harder - much of it has already been pulled out of the ground and what is left, isn't exactly accessible to the average person. Once upon a time, in some locations, it might not have been seen to hold quite as much value as it does today. I wonder if they had to have guards to stop theft at temples and stuff back in the aztec times. Gold has a scarcity value and a well-established narrative as a store of value. Once upon a time, that narrative didn't exist, even though gold did.
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