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Comment by dahdum | Hacker News Reader

"So I'd agree that the sum of all e-coins will surpass gold, but I see no reason for Bitcoin to do it alone."

We could pick any number of gold-like commmodities, but like Bitcoin, gold has had a history of large expenditures to acquire it. Both are buoyed by that past.

So many tokens and blockchains are coming out with incremental improvements or niche capabilities, but in the end I think consolidation of market cap is inevitable. I think it ends up Bitcoin as store of value, Ethereum as contracts/api and a large amount of application specific token/chains. Most applications would be backed by ethereum (like most tokens are now), but ones like Ripple could definitely be top 5.

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Both are buoyed by that past.

That bitcoin is a (sort-of) working cryptocurrency and that bitcoin has a history are basically the primary arguments for bitcoin's continued value.

But it seems implausible to claim that this will allow bitcoin to become a store of value investment. I think it's clear those buying bitcoins today either are doing so with an eye to increase their investments through bitcoin's rise or are trying to get money out of some nation which prevents capital exports.

As a thought experiment, if a person knew for certain that bitcoin would have the same price in six months, would that person ever prefer bitcoins to a us savings account with the same amount of money? It seems to me no one would.

Moreover, if bitcoins are essentially always going to be speculative, this leaves that possibility of them always being possibly displaced by an equivalent.

If you were in Venezuela you would certainly prefer to own Bitcoin if it had the same buying power in 6 months than keep local currency. Could be said of rubles and other currencies as well.

Even in the US, holding Bitcoin at the same buying power would be a hedge against inflation.

Of course the Bitcoin price in USD would still fluctuate, if it were pegged to USD there wouldn't be much use other than easier to move around.

Or, as a much more probable alternative, the whole blockchain fad dies out as it should. The blockchain is a solution in search of a problem. It is cumbersome, slow, and an absolutely ginormous energy pig. The only thing it is good for is speculation and giving a particular type of libertarian an-cap a hardon. It is useless for mainstream anything.

I respectfully disagree with your conclusion.

There isn't one company for internet searches and there isn't one provider for online video content. Why should there be just a handful of currencies?

The natural state of a healthy ecosystem includes competition and variety.

There is only a handful of companies for internet search, no?

75% of all searches are Google, 10% Baidu, and 8% Bing. Youtube represents the vast majority of online video content. Netflix the vast majority of on demand television.

I only mean to say a handful will capture the vast majority of market share/cap.

For now, those companies were different 10 years ago, Netflix has it's own issues if my viewing options are the same as everyone else's these days.

Google is losing market share of searches last I looked. Baidu searches have doubled in percentage marketshare.

Youtube and netflix are both on demand television as are amazon instant, modern cable tv subscriptions, and a variety of specific channels (hbo, showtime, etc).

There will definitely be use case dominance, but they may not be the same whales as we currently see.

We could pick any number of gold-like commmodities, but like Bitcoin, gold has had a history of large expenditures to acquire it. Both are buoyed by that past.

I would have put that the other way around ("like gold, bitcoin ...") but even so the scale of the relevant histories are not even in the same ballpark. Bitcoin has had held value for seven years. Gold for more than seven thousand years.

Gold has had some ridiculous swings along the way too, though I doubt anything like BTC.

The scale is incomparable, but every year the history grows and the likelihood of permanent acceptance increases.

> Gold has had some ridiculous swings along the way too...

The Spanish pulled a large amount of gold out of their New World colonies. It reduced the price of gold in Europe... by 20%. That seems to me to be not much of a swing, given the magnitude of the event.

The biggest swing that I know of was when the US allowed the price of gold to move. The US held the price of gold at $35/oz from (about) 1932 to (about) 1975. When they allowed gold to float, it went to $200/oz, dropped to $100/oz, then went to $800/oz. But I'd ascribe that set of "ridiculous swings" to government messing with the market, not to gold itself.

Off topic, but too fun not to mention: An ounce of gold weighs more than an ounce of feathers. This is because an ounce of gold is a troy ounce (1/12 of a pound), and an ounce of feathers is an avoirdupois ounce (1/16 of a pound).

As a native from a country that uses the metric system, this sentence is both amusing and saddening.

Another interesting swing was Mansa Musa:

> Musa's generous actions inadvertently devastated the economies of the regions through which he passed. In the cities of Cairo, Medina, and Mecca, the sudden influx of gold devalued the metal for the next decade. Prices on goods and wares greatly inflated. To rectify the gold market, on his way back from Mecca, Musa borrowed all the gold he could carry from money-lenders in Cairo, at high interest. This is the only time recorded in history that one man directly controlled the price of gold in the Mediterranean.

https://en.wikipedia.org/wiki/Musa_I_of_Mali

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