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Comment by ineptech | Hacker News Reader

The anti-crypto case is not that it's "worse" than some other speculative investment asset (gold, comic books, etc), it's that crypto is a speculative asset, as opposed to the things it's sometimes claimed to be (e.g. currency, a new way to do finance, etc).

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This is something I’m stumped myself about. HN etc says crypto has no value and I wonder about other things in conventional finance that are of speculative value :

Gold - Sure it’s a good store of value as a metal but so is bitcoin. If Gold can be valuable because lots of people value it as a store of value so can Bitcoin. In fact bitcoin is arguably better than Gold.

The total wealth of the world is 1000 trillion. Bitcoin is easily worth 0.1 - 0.5 % of that because of its permissionless advantage. Bitcoin has a non zero floor price. I think anyone would agree with this.

This is unlike say NFTs which are not likely worth anything with a potential floor of 0.

Loss making stocks like Snapchat - A company that said in its IPO filing that we may never be profitable and is still struggling with profitability is worth 100B.

If conventional finance is 50 % a Casino based on social factors why can’t there be one more ? Are the purveyors of the current system afraid that they’ll lose their cut ?

What is the right mental model here ?

One huge difference between Bitcoin and gold is that gold can be possessed purely on one's own. Bitcoin requires the continuous expenditure of energy to maintain the record of ownership.

> energy to maintain the record of ownership.

That is entirely incorrect.

Energy is expended to allow transfer of ownership, not to maintain the record.

If all miners save one dude with a laptop stopped to mine transactions tomorrow, you still wouldn't be able to spend Bitcoins for which you don't own the private key.

I agree with your technical clarification, but there would be no point in owning a balance if the ability for someone to receive it in a transaction without fear of double spend disappeared. Therefore, I stand by my statement. Bitcoin has no value without continuous expenditure of energy.

If we run out of energy aren’t there bigger things to worry about ?

> Bitcoin has a non zero floor price. I think anyone would agree with this.

I don't. I don't think it's literally zero - even if it drops to $.01 some people will still buy it on the theory that it might go up to $.02. But all of its value is speculative, I don't think it has any intrinsic value (which is equivalent to saying I don't think participating in the crypto economy, smart contracts and all that, has value). And the reasons are as explained in the article - beyond avoiding regulators, it doesn't allow us to do much that we couldn't do before, and what it allows us to do isn't all that valuable.

Even if I knew with absolute certainty that I would never be able to sell it for a profit, I might still buy gold, e.g. to make conductive wire. That's the intrinsic value. What's the equivalent for BTC? How many bitcoins would you buy if you knew that you would not be able to sell them for a profit?

Why does gold have a non zero floor price and not Bitcoin ? Is it merely because Gold has industrial uses ? That floor would be far lower than Golds current price.

Gold has important uses in industry

Gold has important uses in jewellery

Gold has a natural scarcity, is easy to store, hard to steal. Crypto has no natural scarcity (other than a reluctance to waste energy), is very hard to store and relatedly is very easy to steal.

Yes. Gold has both speculative value (you can sell it for more than you bought it for) and intrinsic value (you can use it for stuff). A bitcoin has speculative value only, as far as I can tell. Whether the same is true of crypto generally (including defi and daos and so forth) is open for discussion and one of the things being argued over in this thread.

All monetized assets like USD or gold are "speculative". I speculate that my dollar probably won't lose more than 10-20% of its value in the next year.

The value of the dollar has a floor in that the US government requires that you remit your taxes in dollars. Sure, the US could cease to exist, but that is far less likely than any scenario where bitcoin goes to zero.

The demand introduced by US tax obligations is a vanishingly small fraction of USD demand.

Anything that hasn't happened yet is "speculative" I guess, but in this context speculative means you bought it because you think you can sell it for more tomorrow, as opposed to buying it for its intrinsic value.

Right, like USD, except replace "for more" with "not too much less".

Ah, I think I see the misunderstanding now. I argued that cryptocurrency is only speculative, and hence unlike a currency which has other uses. I did not argue the inverse (that currency only has other uses, and is not speculative).

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