Crypto is a better version of gold and a store of wealth that whose supply isn't at the whims of central banks.
Gold has a purpose. Central banks may pretend that gold serves no purpose in a modern economy, but they still hold on to trillions in gold. I hope eventually they'll get around to holding a crypto currency like Bitcoin. They're just upset they don't have a head start in accumulating a reserve.
Gold is shiny pebbles people are willing to pay money for. Crypto is spreadsheet cells people are willing to pay money for. Well, some amount of money -- mostly Tether though, which is likely in turn backed by the same crypto lol. It's really an open question just how much new real money is flowing into crypto.
It's all pretty clear in the settlement Tether signed [1]. Particular note are #17, #20, #36, #43-46
There is a need to have a medium of exchange for trade. Barter has its limitations. For all of history, people have created new forms of money for exchange. The primary characteristics you would need is scarcity, clear ownership, transferability and fungibility. Gold serves this purpose, and Bitcoin even more so.
The fact that gold is a shiny pebble is not adding anything meaningful to the conversation.
Neither gold nor bitcoin are particularly good for the purpose you are suggesting -- that's why gold was replaced with fiat currency. Because fiat currency was better. Bitcoin chasing after gold's position is unfortunate because of course, fiat is better than gold.
The characteristics you need for a medium of exchange are:
- fungibility.
- the ability to hold its value for exactly as long as you need to hold onto it. Any longer than that is a non-goal.
- stability/predictibility.
- the ability to adjust to shocks, and a changing population.
- low cost of transactibility.
Scarcity is a non-goal. Clear ownership is a non-goal except in as much as possession is 9/10th of the law.
Basically none of these apply to gold, and basically none of these apply to bitcoin. That's why nobody uses it as such.
Generally speaking we don't need to wait as long as the previous iteration existed to prove the new generation is successful.
For instance, I think it's fair to say e-mail is a success, even though the first postal system was established under Cryus the Great in 550 BCE in Persia. The first e-mail was sent in 1971. Are you saying we won't be able to declare victory on e-mail until the year 4492?
Obviously. However, that doesn't mean email isn't trivially an improvement lol. And it certainly doesn't mean we need to wait two thousand years to make that claim. C'mon now, that's patently ridiculous.
If you owned all the gold, people would still want to buy gold. If you owned all the Bitcoin, nobody would want to buy Bitcoin. The only value stored is the network of people pumping it, and the only question is how long it’ll take them to move on to the next thing.
> The fact that gold is a shiny pebble is not adding anything meaningful to the conversation.
Not the parent's argument, but TECHNICALLY speaking Gold as a shiny pebble can be used for jewelry, wiring, etc. It TECHNICALLY has utility.
Bitcoin has no inherent utility. ETH (and derivatives) on the other hand can power a smart contract which actual real business value, but the fact that it has a currency associated to it is generally meaningless.
Gold has a purpose. Central banks may pretend that gold serves no purpose in a modern economy, but they still hold on to trillions in gold. I hope eventually they'll get around to holding a crypto currency like Bitcoin. They're just upset they don't have a head start in accumulating a reserve.