Comment by Obi_Juan_Kenobi | Hacker News Reader

Comment by Obi_Juan_Kenobi | Hacker News Reader

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Obi_Juan_Kenobi

Saying that Ethereum is strictly superior to Bitcoin is a very bold statement. I would certainly not invest based on that assumption.

First, Bitcoin is already as good as it will ever need to be to function as a practical store of value. Even without scaling, it can support enough transactions to effectively work this way. This can support price growth for a long time, and first-mover advantage is critically important here.

Second, Bitcoin development, as fraught as it is, isn't dead. If such changes come about as to make Bitcoin seem obsolete, there's still a good chance that Bitcoin would adopt those changes. Also consider that a solution for an effective 2-way swap would make protocol differences essentially moot.

Finally, I admire Vitalik and other Ethereum developers and think their musings about cryptocurrencies in general have advanced the field as a whole. However, I'm still skeptical that Ethereum, as envisioned by Vitalik, can be made to work through sheer force of engineering. It's stunning how far it's come, but it still faces very real problems. A successful move to proof of stake would be the first indication that it might happen.

Footnote: "consensus under one leader" is probably the most critical weakness for Ethereum right now. Not only for legal/state interventions with the DAO precedent, but as a single point of failure. I think it's fair to say that Satoshi left Bitcoin precisely because it needs to "stand on its own feet" if it's to be truly decentralized. In this way, I consider Bitcoin to be far more mature.

There is one practical difference between Bitcoin and Ethereum that i like to think about - Ethereum is actually creating a platform. In theory Bitcoin is capable of that too, but in practice the core community is quite religious about keeping it as money. Meanwhile Ethereum is creating more surfaces of research and engineering (e.g. token standard, identity standard, swarm network).

It's interesting to compare to all the altcoins that were created after bitcoin to OS era in around 80s and early 90s. Now we are closer to Web era. It's not that the research in OS's is no longer there. It's just that the next abstraction layer is an enabler for simply more people.

You make good points, but I think where having Vitalik makes a difference is evident in the large number of contentious hard forks Bitcoin has had/will have this year. Obviously the Ethereum model isn't perfect, or else we wouldn't have Classic, but I think it helps to have one person who says "follow me, this is the way we are going".

"Bitcoin is already as good as it will ever need to be to function as a practical store of value."

Bitcoin is the worst possible 'store of value'in any financial scenario.

It's highly volatile, subject to unknown future regulations, competition from other things - and of course, it could go to zero tomorrow.

Moreover - there are any number of other, better opportunities for 'store of value' - most notably real-estate.

There has been demand for real-estate in London for at least 1000 years.

So think, in 100 years, will there be at least some demand for real-estate in London. Probably. Probably more than today - but at least some.

What will the demand be for BTC in 100 years? Will it even exist? Will anyone even remember what it is?

The volatility alone makes it really not something you want to 'store a lot of value for the future'.

Just because there is pragmatically a 'fixed number of BTC's that will ever be created, and that it has some crypto-viability - does not inherently make it a 'good store of value' - or a 'store of value at all'.

It's probably most useful to compare Bitcoin to gold (apparently the Biggest Bubble in Stock Market History: http://gainspainscapital.com/2017/08/08/officially-biggest-b...).

Let's take a random sample of reasons why gold is a store of value: https://www.quora.com/How-did-gold-become-the-historical-sta...

Pretty much every of those attributes can be created in most cryptocurrecies (or made obsolete), with arguably these exceptions:

- Universal (as of now) - Bitcoin is indeed universally recognisable and tradable, compared to other cryptos.

- Stable - very unknown, but so far the long age of Bitcoin made it a bit more stable than most other well-known alternatives. Though that could be challenged if an inherently stable cryptocurrency mechanism is invented.

Perhaps universality will be always there and will be enough. But overall that makes me bend in the direction that inherently there is nothing special about Bitcoin in the long term, while other cryptocurrencies are researching and reinventing very foundations of value, trust and finance in general.

Imagine if there will be no reason for any currency to be a store of value in the future. Why choose that, versus some kind of automatically diversified crypto-index or other portfolio, that is for example bound assets related your interests and beliefs as a person.

Just take a micro-sized chunk of it each time you make a payment.

Here's a big difference - Bitcoin requires the existence of a computer network and all that entails about global stability (computers, electricity, infrastructure). Gold (or any physical medium of exhange) doesn't.

Those people that hold gold as a hedge don't hold gold. They hold a database entry on a computer somewhere that assigns them ownership of some gold (supposedly) in a vault somewhere.

This requires global stability, and a great deal of blind trust in multiple third-parties.

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