- gold is valuable because it's hard to extract, and because it maintain its properties over time unlike a lot of other metals. the use of gold in electronics is probably in the single percentage digits of all the gold mined each year, and recycling of metals from electronics is getting better
- the intrinsic value of one BTC is zero (I might argue it's even negative) but the value it has is extracted from the volume of the transaction in their network. so while it might go down, there has been a significant number of people that are fine using BTC for their transactions, and so even if BTC would go back to $200 they would have no problem using it. Very hard to go to zero at this point (unlike a ton of other altcoins who have no transaction volume and were only acquired for speculation)
- using BTC for criminal activity is pretty terrible, as all your transactions are public and trackable. usually Monero is used for ransomware (in this case I don't think they would have been able to acquire 5m in Monero so quickly) - I guess that the ransom BTC are going to be turned into Monero to be laundered. and in fact we are due for a showdown in privacy, as cash is private, and there is going to be demand for something similar from crypto, but BTC is not
Currency and money are different things. Currency is a tool used by governments to manipulate the economy. Money is a store of wealth. Gold is money. Dollars are currency. Dollars are used to buy and sell things. you cannot buy and sell with gold but it is still a store of wealth, while currency is eroded by your government.
I'd recommend people watch Simon Dixon's videos on the 5000 year history of money. He wrote the first book on Bitcoin and many of his predictions have come to pass.
Simon is the only one I have seen so far in the Bitcoin community that offers sensible advice. That being don't be a trader, as 90% of traders lose to the 10% of insiders, and they create huge taxible events with their trading that takes all of their remaining Bitcoins. Traders are gamblers. Simon advocates setting aside a little of your income each month to buy Bitcoin, regardless of whether it is in a short term manipulated bubble.
What we are seeing right now is market manipulation by insider Elon Musk. I knew this was coming last year when the IMF bankers met up and their leader announced that Bitcoin is the biggest threat their finacial system has ever faced, and he said they are going come after it and tame it. Elon Musk is clearly working for these banksters, because he is seeking to replace Bitcoin with a crypto coin that behaves exactly like fiat. That being it costs its producersnothing to create an infinte supply of.
Don't trust Elon Musk. He is not a good guy. Proof here:
It does seem like you're assuming the bitcoin software cannot change over time. This would lock in a very narrow set of use cases for bitcoin. Yet if you look at proposals like BIP300 (https://bips.xyz/300), you could see decentralized sidechains which could enable a lot of smart contracts (like uncensorable prediction markets, or faster transactions). Trying to calculate Bitcoin's value without accounting for the future of "programmable money" is like saying the internet is useless in 1992 because you already have cable TV.
There are also lots of other bitcoin use cases today, like international wire transfers without having to use a bank, and store of value protection if your national currency is poorly managed. It's not always a given that people can get access to well managed foreign currencies like dollars.
And have you considered markets that are in a gray area? It's not illegal for sex workers online to take credit card payments, but they often are censored anyway. Legal marijuana dispensaries in the US operate within state law but face difficulty with regular banks. Bitcoin fixes that.
Last, if there are these base use cases, then it might also make sense for investors to hold it as an inflation hedge (similar to holding gold). The combined uses here (not including speculation) could offer a much higher price.
couple of things:
- gold is valuable because it's hard to extract, and because it maintain its properties over time unlike a lot of other metals. the use of gold in electronics is probably in the single percentage digits of all the gold mined each year, and recycling of metals from electronics is getting better
- the intrinsic value of one BTC is zero (I might argue it's even negative) but the value it has is extracted from the volume of the transaction in their network. so while it might go down, there has been a significant number of people that are fine using BTC for their transactions, and so even if BTC would go back to $200 they would have no problem using it. Very hard to go to zero at this point (unlike a ton of other altcoins who have no transaction volume and were only acquired for speculation)
- using BTC for criminal activity is pretty terrible, as all your transactions are public and trackable. usually Monero is used for ransomware (in this case I don't think they would have been able to acquire 5m in Monero so quickly) - I guess that the ransom BTC are going to be turned into Monero to be laundered. and in fact we are due for a showdown in privacy, as cash is private, and there is going to be demand for something similar from crypto, but BTC is not
It can be the be gold.
Good point about criminality. Government might try destroying bitcoin because of its criminal use
Currency and money are different things. Currency is a tool used by governments to manipulate the economy. Money is a store of wealth. Gold is money. Dollars are currency. Dollars are used to buy and sell things. you cannot buy and sell with gold but it is still a store of wealth, while currency is eroded by your government.
I'd recommend people watch Simon Dixon's videos on the 5000 year history of money. He wrote the first book on Bitcoin and many of his predictions have come to pass.
Simon is the only one I have seen so far in the Bitcoin community that offers sensible advice. That being don't be a trader, as 90% of traders lose to the 10% of insiders, and they create huge taxible events with their trading that takes all of their remaining Bitcoins. Traders are gamblers. Simon advocates setting aside a little of your income each month to buy Bitcoin, regardless of whether it is in a short term manipulated bubble.
What we are seeing right now is market manipulation by insider Elon Musk. I knew this was coming last year when the IMF bankers met up and their leader announced that Bitcoin is the biggest threat their finacial system has ever faced, and he said they are going come after it and tame it. Elon Musk is clearly working for these banksters, because he is seeking to replace Bitcoin with a crypto coin that behaves exactly like fiat. That being it costs its producersnothing to create an infinte supply of.
Don't trust Elon Musk. He is not a good guy. Proof here:
https://www.youtube.com/channel/UCgKWj1pn3_7hRSFIypunYog/videos
Simon Dixon's Twitter
https://twitter.com/SimonDixonTwitt
It does seem like you're assuming the bitcoin software cannot change over time. This would lock in a very narrow set of use cases for bitcoin. Yet if you look at proposals like BIP300 (https://bips.xyz/300), you could see decentralized sidechains which could enable a lot of smart contracts (like uncensorable prediction markets, or faster transactions). Trying to calculate Bitcoin's value without accounting for the future of "programmable money" is like saying the internet is useless in 1992 because you already have cable TV.
There are also lots of other bitcoin use cases today, like international wire transfers without having to use a bank, and store of value protection if your national currency is poorly managed. It's not always a given that people can get access to well managed foreign currencies like dollars.
And have you considered markets that are in a gray area? It's not illegal for sex workers online to take credit card payments, but they often are censored anyway. Legal marijuana dispensaries in the US operate within state law but face difficulty with regular banks. Bitcoin fixes that.
Last, if there are these base use cases, then it might also make sense for investors to hold it as an inflation hedge (similar to holding gold). The combined uses here (not including speculation) could offer a much higher price.