This argues that BTC is not money based on the big 3 properties, without considering that BTC has been running only for 11 years.
BTC/Gold is probably the best way to store wealth across time on a 10+ year time horizon without losing much "energy".
Historically fiat currency has been an anomaly, we don't know yet how long it will last. Only time will tell if this is the best form of money. Either way, it's always good we have alternatives.
So was the Gold standard, which didn't become a thing before the end of the 19th century. Before that, the standard money system (at least in Europe & Islamic territories) for the previous 2000 years was the combination of Gold and Silver with a fixed exchange rate. It ended up not being well suited to the beginning industrial civilization and was replaced by Gold+paper money around 1870. And then, when industrialized countries grew in number and in development, gold+paper was progressively abandoned in favor of paper-only money (the US were the last, but pretty much everybody had abandoned it after WWI and WWII).
The industrial civilization itself is also an historical anomaly, and if it ends, maybe gold (or gold + silver) will come back. But in that event, I'm not optimistic about bitcoin's chances of survival…
Arguably silver sterling standard of England can be considered equivalent to modern fiat money, too - a critical component of its value at one point became the fact that tax payment was defined in pounds of sterling silver. It was just a bit easier to convert without special exchange accounts ;)
My one big issue with thinking about BTC as gold/commodity, is at least at the end of the day gold has actual uses. I can make jewlery, or use it in components. BTC has no inherit value at all. My only reason to own BTC is because other people also want it.
That just establishes a price floor. Gold's "inherent" value is substantially below the current price. It is, like BTC, a largely speculative asset that holds the majority of its value "because other people also want it."
gold use case is only 5-10% of it's actual market cap
- if gold price were to go up because of currency debasement, it's industrial use will decline
- if gold price were to go down because of let's say BTC, it's industrial use case will increase. Can even replace copper use cases if cheap enough
problem with gold is that there's a consistent 2% supply inflation per year and if gold price shoots up, Miners mine more and i'm technical innovation will inflate supply further(asteroid mining or atleast cheaper mining techniques). So if you're a gold holder, gold miners go against your value. in the long run gold is not a great investment but it is still better than most of the other stuff that can be produced easily with machines etc.
Bitcoin supply issuance is predictable and mathematically known and provable. If prices goes up, more people mining only increases the security and decentralization of the network. So if you are BTC holder, BTC miners are your friends not enemies unlike gold.
> Where the demand comes from does not enter the conversation
Econ 102: Where the demand comes from matters. Aka "substitute goods".
Gold has no convenient substitutes for the combination of ductility, corrosion resistance and electric conductance it offers, hence demand has a (high) floor.
BTC has an infinite number of convenient substitutes for its fundamental properties -- anyone can make a BTC substitute in half an hour, and there are hundreds you can buy already. So the floor on demand is the psychological buy-in -- which is not any better than the demand floor for tulip bulbs.
> at least at the end of the day gold has actual uses
TBF gold doesn't really have uses outside of industrial societies.
Sure it's shiny so you can make pretty out of it (jewelry and other decorations), but for the most part it has properties: it's ridiculously stable, it's easy to work with, and it's rare enough that the supply is rather limited but not so rare that it's essentially nonexistent (unlike the platinum-group metals).
In economies which are static or very slow to grow (aka preindustrial) this makes it a convenient store of value, because it's a slowly but ever-increasing (to the approximation of your supply sinking with a ship) supply.
Outside of a few incredibly niche industrial uses that have only emerged in recent years, no one has had any need of gold except as a means of storing and exchanging value. It has been used as a store of value and as a currency throughout history and across cultures for a number of reasons, such as its recognizability (few things in nature are the same color), its difficulty in counterfeiting (gold has a number of unique properties like its density that would make it very obvious if you were trying to pull one over on a merchant), it's ease-of-use (gold is highly malleable and has a very low melting point, meaning it can easily be made into coins or bars), its rarity (supply is reasonably constrained by the difficulty of mining), its permanence (gold will not tarnish except under extreme conditions, so it's okay to leave in a vault for years on end). However an important property that also contributed is specifically gold's lack of utility - steel was very valuable in pre-industrial societies, but a pound of raw steel is worth less than the tools that could be made from that same pound of steel, so if anyone made steel coins, they wouldn't remain coins for long. If anything, the development of real uses of gold make it less desirable as a store of value - speculation artificially drives up the cost of consumer goods like electronic devices.
People need to be able to store and transfer wealth. Tools which facilitate this are valuable for being able to serve that purpose. Gold is one such tool, and a pretty good one at that.
I wonder how much "inherent" value gold actually has vs how much value we ascribe to it though. I.e. nobody is holding onto a 2 inch cube of gold instead of a house because at the end of the day they could make some jewelry out of it if it comes to it.
On the flipside any currency-like concept that could come to be worth more as the raw commodity than the currency seems inherently unstable as you'd be better off using it than keeping it.
You'd have to look at a lot more than that. What are the demand/supply curves and how will the change in supply affect the value, what's the actual inherent value in the jewelry vs the value from gold having ascribed value and being used in jewelry, once you have that how much of the value in jewelry is itself an investment of gold vs other value. Repeat for each remaining sector. All that graph tells you is the demand for gold would be non-zero if its utility as a form of currency/investment went away, it says nothing of how much inherent vs ascribed value we put in it.
I don't have answers to the above, I think they'd be extremely hard to get, which is why I used the house vs 2 inch block of gold to illustrate there is at least a significant amount (likely the majority) of the value is ascribed rather than try to put a quantitative number on it.
None of the perks are beneficial to the consumer. The consumer just sees the onerous process of converting btc to usd, and sees the currency as speculative like a penny stock and nothing more. The only people who are long interner are the same people as they were 10 years ago. For most people, btc is a slot machine.
Censorship resistant is not useful to the consumer? If a vendor has been financially censored then bitcoin is surely useful. For instance, if you want to purchase a 4chan pass, its crypto only baby.
If you ever send a gold bar across the world, I'll send you a beer.
I won't pay the beer with bitcoin though, to expensive for normal use, that includes conversion to euro back and forth in USD/EUR to actually use it :)
Bitcoin is an impetus for democratic governments to implement a better system that will align us all via trust, decision making, and not be rallied through a financial system that has an MLM/pyramid scheme structure - financially incentivized to join/promote it, unnecessarily, unreasonably transferring wealth weighted towards earlier adopters from later adopters.
"Bitcoin is almost as bs as fiat money" - Elon Musk; slightly better bs than fiat money isn't the answer.
BTC/Gold is probably the best way to store wealth across time on a 10+ year time horizon without losing much "energy".
Historically fiat currency has been an anomaly, we don't know yet how long it will last. Only time will tell if this is the best form of money. Either way, it's always good we have alternatives.