/biz/ - Business & Finance

>>26991723

Nothing has intrinsic value. All money is backed by Confidence. Confidence is a function of utility and likelihood of deprecation by competing money or other factors.

Gold is the best form of commodity money due to its physical properties. Winning out over seashells and such. Has somewhat limited utility inherent to all commodity money, but extremely high and stable confidence due to it's simple, eternal, self-contained nature as final payment, long track record, and lack of possible competitors. No gold 2.0 or hard forks of gold are coming.

Paper money is the second type, originally IOUs for gold, it essentially took over silver's role due to its utility. Later they severed the convertibility, an assertion by govt that their word was just as good as gold. It was not, hence gold remains money to those with no Confidence in govt. Currently the Dollar is the winner among the various types, due to inertia, utility, and greater confidence in US govt. High utility, but inherently as unstable and ephemeral as humans. The Dollar is currently losing confidence, soon to be replaced in the #1 spot.

Decentralized ledgers are the newest type. Get "digital gold" out of your head, this is marketing. It has little in common with commodity money. It has high utility in certain scenarios, but not as high as paper money. Hence no "mass adoption" event yet. Technological improvements may yet change that. The #1 is Bitcoin, held in place primarily by a first-mover advantage and a network effect not unlike social media. Low confidence, as it can lose #1 with little warning to competitor(s) with greater utility, and likely will, as software is ever-changing. Issuers of paper money can and will make every effort to limit its utility, as it is a threat to their power. Unfortunately, this probably means its realm will remain illicit transactions for the time being. Drastic tech advances may give it enough utility to stage a popular revolt and take over, no signs of this yet.

>>25670507

I think crypto currency is a good, and basically valid idea. I have to preface with that because the maxis never like hearing what I have to say on this: "digital scarcity" was always a stupid pro-bitcoin point, any software can and will be copied. Usually the copies will be technically superior and offer greater utility anyways.

Bitcoin's confidence as a currency is protected not by any real scarcity but by a first-mover advantage and a network effect, which it gained by providing utility that visa or paypal could not (buying illegal shit online). That may be enough to keep it from being overcome the technical superiority and greater utility of its derivatives, but judging from it's many problems and the obviously better qualities of the leading contenders, I think it's possible it will lose the crown and become the crypto myspace to some other coin's facebook.

So bitcoin isn't really comparable to gold so much as a social network, basically. If your conception of its value comes from this, IMO you are making a mistake and should drop that thinking pronto. Additionally, it is very unlikely to ever back fiat currency as an implicit reserve the way gold does, so that is another mistake, but also another topic.

A more clear-headed perspective is to consider the fundamental technical capabilities of a crypto currency, and how that may confer enough utility to create a network effect that will endure challenges by fulfilling its use-case in a "good enough" fashion that people will not be wooed away from it by challengers. I would suggest that you watch the people who REALLY use crypto day to day (because it has actual utility for them) and see which coin they prefer. That's the sound of a little canary not chirping, frens.

>>22230219

Very nice, you got your bases covered m8.