Can you explain why gold is as valuable as it is? And no, the answer is not "you can use it in jewelery and circuits".
Fiat currencies aren't technically any different, but you can use them to pay taxes and their value is insisted on by armies, which does count for something.
Bitcoin's value is that it's
* Fungible
* Divisible
* Verifiable
(All qualities that gold has, but Bitcoin does them a lot better)
as well as being
* Stupidly easy to store and transport
* Extremely difficult/impossible to confiscate
* Not subject to devaluation due to an as-of-yet undiscovered deposit
> If there are no transactions,
There are, as of now, on the order of five transactions per second. How many times per second do you think people are trading gold?
> Fiat currencies aren't technically any different
Well, there's at least one difference; fiat currencies can be easily devalued by inflation. Gold can't be inflated by fiat, but it could be inflated by the discovery of a large deposit (or asteroid mining). Bitcoin can't be inflated at all, period.
> but you can use them to pay taxes
If you have an asset, you can sell the asses to pay taxes or court-ordered payments. The small friction involved in converting the asset to fiat money is factored into the price of the asset. (Incidentally, one of the benefits of Bitcoin is that it's less beholden to taxation than traditional clearing house/bank-held assets).
> and their value is insisted on by armies
I've seen this meme a few times, and I honestly don't understand how anyone can say or write this out and not think to themselves "Wait, this doesn't make any sense at all.". I'm pretty people started saying this as a joke.
What is this even supposed to mean? If I attempt to sell something for USD above a certain price, is the army going to kick down my door and threaten me until I place a higher value on the dollar?
I agree with this. I also think it's one of the strongest arguments for participating in the bitcoin experiment.
It's not a binary choice. Things don't have to be pure speculation or pure 'real' value.
Yes, and it's very very small.
https://www.quora.com/If-gold-werent-used-as-a-store-of-valu...
The vast majority of gold's value comes from its utility as a fungible, divisible, verifiable value store.
I don't think Bitcoin's delusion will last more than another decade. We'll probably find a way to design a delusion that distributes value "fairly" rather than to a class of nerd overlords. But until then, it's a fun story to watch.
If the only way to obtain water was through my exclusive 'magic beans' tokens, then they would have real value too.
Bitcoin ownership gives you nothing, except perhaps an increased risk of hacking losses...
